Positive pay is a system in which the account holder has to give the details of the cheque to the bank. The bank while clearing the cheque will match the details mentioned on the cheque with that provided by the account holder. If the details match then the cheque is cleared if not then the cheque is canceled by the bank.
Cheque payments are very common in India, even when we have many modes of payment in India. We Indians also use the cheque mode of payment in large numbers. So there is a requirement to make things safer for the account holders.
This is where the Reserve Bank of India entered into the game. RBI has introduced a new regulation for all the banks. Be it the private sector or the public sector to implement the system of Positive pay in their operations. We should also note that a feature similar to this was there in ICICI Bank for a long time now.
If you are an account holder of the ICICI Bank then you might be knowing about it. In the cheques section of the internet banking and mobile banking app. You have a section where you have to enter the details of the cheque that you have issued.
When you enter your details there you are basically sending the details to the bank. Once the beneficiary goes to the bank to clear the cheque. The bank will cross-verify the details mentioned on the cheque. If everything is as per the information you entered in the Positive Pay section. Then the cheque will be cleared if not the cheque is canceled.
What is the Minimum Value of Cheque for Positive Pay System?
As per the RBI notification, all the cheques of value Rs.50,000 and above shall come under the positive pay system. If you are issuing a cheque of value less than Rs. 50,000 then there is no need to submit the details of the cheque to your bank.
How Can I Submit the Details of Cheque to my Bank?
The account holders can submit the details of the cheque to their bank by using internet banking, mobile banking, SMS banking, and the ATM Machine.
NPCI is responsible for developing the system and providing it to all the participant banks in India. And later the banks will enable it for all the account holders.
What are the details that I have to Give to My Bank?
You have to provide the details mentioned below to your bank once you have issued a cheque of value Rs. 50,000 or more.
- Cheque Number
- Cheque Date
- Cheque Amount
- Beneficiary Name
- And Instrument type
Is PPS Mandatory?
Yes, the use of PPS or Positive Pay System is mandatory for all account holders who have a cheque book issued. If you are issuing any cheque whose value is more than Rs. 50,000 then you will have to go through this system.