Positive Pay Mechanism
- Positive Pay is a fraud detection tool adopted by banks to protect customers against forged, altered or counterfeit cheques.
- It cross verifies all details of the cheque issued before funds are encashed by the beneficiary.
- In case of a mismatch, the cheque is sent back to the issuer for examination.
- By following such a system, a bank knows of a cheque being drawn by the customer even before it is deposited by the beneficiary into his/her account.
- RBI has introduced a new 'Positive Pay' mechanism which will make cheque payments safer and reduce instances of frauds.
- Under the new system Issuers will be able to send all details to their bank, thereby ensuring faster clearance of cheques above Rs 50,000.
- All cheques will be processed as per the information sent by the account holder at the time of issuance of cheques.
- This will cover approximately 20 per cent of transactions by volume and 80 per cent by value
