Positive pay confirmation: Making cheque payments more reliable

Hyderabad: While digital payments rule the roost, issuing cheques, particularly for high-value transactions, is still an important aspect of the banking system. There have been some cases of amounts getting tampered and signatures being forged. But now, an extra level of security has been added — the positive pay confirmation. Under positive pay confirmation, the […]

Hyderabad: While digital payments rule the roost, issuing cheques, particularly for high-value transactions, is still an important aspect of the banking system. There have been some cases of amounts getting tampered and signatures being forged. But now, an extra level of security has been added — the positive pay confirmation.

Under positive pay confirmation, the customer informs the bank about a cheque, the amount and beneficiary details, and the bank confirms these details before clearing the cheque. Effective August 1, high-value cheques of Rs 5 lakh and above will need a positive pay confirmation from customers for banks to clear them.

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Several banks have already sent emails to their customers about the new requirement. The process has been developed by the National Payments Corporation of India. Last year, the RBI had issued guidelines for banks to implement the Positive Pay System (PPS) for cheque payments. But not all banks and customers had adopted it.

Now, banks have made this mandatory for high-value cheques. The RBI has said the move was to augment customer safety and reduce instances of fraud. Account holders have the discretion to use the facility for all cheques too, but it is mandatory for amounts of Rs 5 lakh and above.

Channels

Under positive pay confirmation, customers have to register the cheque number, date, the amount in words and numbers, the beneficiary’s name and transaction code with the bank. The bank will verify these details and clear it if there is no discrepancy.

These details can be confirmed via SMS, app, internet banking, ATM, at the bank’s branch or the call centre. There will be no option for modification or deletion once the details are uploaded to the server. However, customers can halt the payment before the cheque is presented for payment in clearing or at a counter.

Confirmation through bank branches can be done during business hours. Other channels will be available 24×7 to provide the positive pay confirmations. A reference number will be shared through SMS on the registered mobile number for every request. Customers issuing cheques have to ensure sufficient funds in the account.