Bank customers alert! Bank may refuse to clear your cheque from August 1: Have you confirmed Positive Pay system yet?
In confirmation with RBI’s latest guidelines, many banks have issued a notification regarding the implementation of the Positive Pay System (PPS) for cheques of Rs 5 lakh or above. Here's all you need to know against the new update on Positive Pay System.
- RBI has modified the check clearance rule from August 1.
- BoB had made PPS mandatory from August 1.
- Customers have to follow PPS for cheques of Rs 5 lakh or above to be encashed.
New Delhi: RBI has modified the check clearance rule from August 1. Following the RBI’s guidelines, many banks have issued a notification regarding the implementation of the Positive Pay System (PPS) for cheques of Rs 5 lakh or above. PPS is implemented in banks for safeguards against cheque frauds.
Several banks including Bank of Baroda (BoB) and State bank of India (SBI) have started to notify the customers regarding the new update. Even, BoB has made it mandatory for customers to follow Positive Pay Confirmation from today (August 1). If the rules are not followed, banks can refuse clearance of such cheques. (Also Read: Gold prices marginally down, Check rates of yellow metal in your city)
RBI has made it mandatory for cheques of Rs 5 lakh or above to follow the new guidelines for all types of cheque payments.
The new rule came into effect on August 1. Following the new update, customers may be asked to follow PPS rules for such cheques to be encashed. However, customers have to complete PPS formalities. So, not every bank had made it mandatory but some banks like BoB had made it. BoB had sent messages to the account holders, "As per the RBI directive, Positive Pay System (CPPS) will be mandatory from August 1, 2022, for cheques issued for Rs 5 lakh & above. Such cheques will be rejected from August 1, if Positive Pay confirmation is not provided." (Also Read: PhonePe files complaint against ex-employees for burning QR codes)
What is Positive Pay System (PPS)?
Positive Pay System (PPS), the component of the cheque clearing system is a process of reconfirming certain details of the cheque. Under the check clearance system, the issuer has to submit certain details such as the name of the beneficiary, date of issue, etc. to the drawee bank electronically like SMS, mobile banking, internet banking, ATM, etc. Later, the details will be cross-checked at the time of payment processing. This whole system is developed by the National Payments Corporation of India.