Friends, if we want to transfer money to someone. So, nowadays we prefer to use electronic transfer mode. We use internet banking, NEFT, RTGS, UPI system. And we must use this system. We can transfer the money instantly, and our security risk is also very less. But, still we have to issue cheques in a lot of cases. Particularly if we have to pay someone at a subsequent date. So, we issue post dated cheques. However, check fraud also occurs often. The amount you have written on the cheque could be altered by someone. Or can forge your signature. Sometimes, people make fraud cheques on your behalf, by forging your signature. And those people try to cash in by mentioning any amount in the cheque. So all these cheque frauds occur.

Positive Pay System for Cheques

How to Avoid Cheque Frauds Using Positive Pay System

To avoid these, RBI and NPCI have introduced a new system. called the Positive Pay System. According to this system, whenever you issue a high value cheque you will have to put additional validation in it, i.e. if you issued a cheque to someone, after that you will put an additional validation through your bank either through sms or internet banking or mobile app. You will re-verify the cheque's details in it. If you use the App, you will enter the cheque number in the App, will enter the date, enter the name of the payee, once you enter all these details, the bank will verify your details whenever the cheque is presented for withdrawal. If there is any mismatch, the cheque will be returned to you unpaid. And the cheque will be cleared only when all those details are matched. So, RBI had issued this circular within 2020. It was implemented by 2021. And RBI has recommended to the bank that in all the cheques above ₹ 50000, the option of Positive pay system should be given to the account holder. But RBI has also recommended that all the cheques above 5 lakhs, that is, the cheques for very high value transactions Banks can make this as a compulsion for those cheques. Although, Positive Pay System has been made optional in all the banks. So whenever you issue a high value cheque to someone i.e. if you are issuing a cheque of more than 50,000 to someone.

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So, you can definitely use this positive pay system. You can avoid all types of cheque fraud. And along with this another important point is If any cheque fraud occurs And if you go to dispute resolution through RBI, So only positive pay system cheque will be considered under the dispute resolution mechanism. This makes this system crucial for people like you and me. So, from next time whenever we issue a high value cheque to someone, we must use this positive pay system. I hope you find this information useful.