Positive Pay System Mechanism
✓It is a fraud detection tool adopted by banks to protect customers against forged, altered or counterfeit cheques.
✓It cross verifies all details of the issued cheque before funds are encashed by the beneficiary.
✓The concept of Positive Pay involves a process of reconfirming key details of large-value cheques.
✓It ensures that every high-value cheque valued at Rs 50,000 and above is crossed checked with details provided by the issuing party or the individual.
✓This will cover approximately 20 percent of transactions by volume and 80 per cent by value.
✓The National Payments Corporation of India (NPCI) will develop the facility of Positive Pay in the Cheque Truncation System (CTS) and make it available to participant banks.
