RBI enhances security features for cheques above ₹50,000: How it will work

Reserve Bank of India (RBI) today announced that it plans to introduce a mechanism called 'Positive Pay' in order to enhance safety features of cheques of value ₹50,000 and above.


The announcement by RBI Governor Shaktikanta Das came in order to keep consumer safety in focus and to lower the cases of fraud and abuse with respect to cheque payment.


Under the mechanism all cheques will be processed for payment by the drawee bank based on information passed on by its customer at the time of issuance of cheque.

Operational guidelines in this regard will be issued separately, Das said.


“Positive Pay is essentially an automated fraud detection tool. Very simply, it matches specific information related to the cheque presented for clearing, such as the cheque number, cheque date, payee name, account number, amount, and other details against a list of cheques previously authorized and issued by the issuer. Unless all the specified components of the cheque match exactly, the cheque will not be cleared," 


How will sitive Pay Mechanism work?


Under the Positive Pay system, an account holder shares the details of issued cheque to bank like Cheque Number, Cheque date, Payee name, Account number, Amount etc along with an image of the front and reverse side of the cheque, before handing it over to the beneficiary.


When the beneficiary submits the cheque for encashment, the cheque details are compared with the details provided to the bank through Positive Pay. If the details match, the cheque is honoured.


This will cover approximately 20% and 80% of total cheques by volume and value, respectively, RBI said in a statement.


On the other hand, ICICI Bank already offers this feature since 2016 via its iMobile application.

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Cheque Truncation System or CTS 2010

What is Cheque Truncation System or CTS 2010 :
The full form of CTS is Cheque Truncation System.  RBI has decided to launch this system and all banks across India are required to follow RBI guidelines in this regard.  As per RBI guidelines, now all banks have to issue cheques conforming to the CTS 2010 standards with uniform features.
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