What is the Positive Pay System, and How Does it Work?

Positive Pay System

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The Reserve Bank of India (RBI) announced instructions for the implementation of the Positive Pay System for the country’s banks. This method has been in place since January 1, 2021, to protect banks from check fraud.

Maximum Amount

The Reserve Bank of India has directed all banks in the country to make this service available to all account holders who are issuing checks of Rs 50,000 or more. The account holder can choose whether or not to use this service, however banks can make it necessary in the event of cheques of Rs 5,00,000 or more.


  • The Positive Pay System was created by the National Payments Corporation of India.
  • The specifics of high-value checks are reconfirmed using this approach.
  • Measures are performed using this system to detect any fraudulent activities involving cheque transactions.

How Does RBI’s Positive Payment System Works?

When submitting a high-value check, the sender must include information such including account number, date, amount, beneficiary name, cheque number, transaction code, and MICR CODE. These details can be submitted through branch visit or by using an ATM, a mobile app, SMS, or online banking. The information is then double-checked while the check is being printed, and any discrepancies are noted. In the event that any differences are discovered, the bank notifies the drawer and withholds payment until a new order is received.

What is the significance of this system for customers?

Customers have been told by several banks that if the information of large-value cheques are not pre-registered, the cheque would be returned to them without charge. Customers should ensure that details are submitted within the timeframe stipulated by the banks for hassle-free clearance when a high-value cheque is issued. Only cheques registered in the Positive Pay System will be accepted under the dispute settlement mechanism, according to the RBI. Customers will receive an SMS indicating if the check was accepted or refused for any reason.

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