Positive Pay System Mechanism: UPSC Daily Important Topic | 8 March 2022

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.