**Policy Summary: Implementation of Positive Pay System for Cheque Truncation System (CTS)**
This policy, issued by the Reserve Bank of India (RBI) on September 25, 2020, mandates the implementation of a "Positive Pay System" for the Cheque Truncation System (CTS), effective January 1, 2021. The objective is to enhance the security and efficiency of cheque processing by reconfirming key details of large value cheques.
Under the Positive Pay System, the issuer of a cheque is required to submit electronically (via SMS, mobile app, internet banking, ATM, etc.) essential details such as the date, payee name, and amount to the drawee bank. These details are then cross-verified against the presented cheque within the CTS. Discrepancies identified by the CTS will be flagged to both the drawee and presenting banks for resolution.
The National Payments Corporation of India (NPCI) is responsible for developing and deploying the Positive Pay facility within the CTS, making it accessible to participating banks. Banks are instructed to enable this facility for all account holders issuing cheques for ₹50,000 and above. While participation is optional for cheques of this value, banks may consider making it mandatory for cheques of ₹5,00,000 and above.
Only cheques compliant with these instructions will be accepted under the dispute resolution mechanism at CTS grids. Member banks are also encouraged to implement similar arrangements for cheques cleared/collected outside the CTS. Banks are advised to create customer awareness regarding the Positive Pay System through various channels, including SMS alerts, branch displays, ATMs, websites, and internet banking.
This directive is issued under Section 10(2) read with Section 18 of the Payment and Settlement Systems Act, 2007 (Act 51 of 2007).
For further information, contact the Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai – 400001. Tel: 91-22-2260 1000; Fax: 91-22-2265 9566; email: cgmdpsscorbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, referred to as RBI, which announced the introduction of the Positive Pay System for Cheque Truncation System.
Positive Pay System: A system for reconfirming key details of large value cheques, where the issuer submits cheque details electronically to the drawee bank for cross-checking.
Cheque Truncation System: A cheque clearing system, referred to as CTS, which is the system that Positive Pay is designed to enhance.
National Payments Corporation of India: An organization, referred to as NPCI, responsible for developing the Positive Pay facility in CTS for participant banks.
Payment and Settlement Systems Act, 2007: The act under which the directive regarding Positive Pay System is issued.
Mumbai, Maharashtra: City in Maharashtra, where the Central Office of the Department of Payment and Settlement Systems is located.
P Vasudevan: Chief General Manager at Reserve Bank of India, who issued the directive.
August 6, 2020: Date of the Statement on Developmental and Regulatory Policies where Positive Pay System for Cheque Truncation System was announced.
RBI/2020-21/41
DPSS.CO.RPPD.No.309/04.07.005/2020-21 September 25, 2020
The Chairman and Managing Director / Chief Executive Officer
All Scheduled Commercial Banks including Regional Rural Banks /
Urban Co-operative Banks / State Co-operative Banks /
District Central Co-operative Banks / Local Area Banks / Payment Banks /
Small Finance Banks / National Payments Corporation of India
Madam / Dear Sir,
Positive Pay System for Cheque Truncation System
Please refer to the Statement on Developmental and Regulatory Policies dated August
6, 2020 wherein Reserve Bank of India (RBI) had announced introduction of Positive
Pay System for Cheque Truncation System (CTS).
2. The concept of Positive Pay involves a process of reconfirming key details of
large value cheques. Under this process, the issuer of the cheque submits
electronically, through channels like SMS, mobile app, internet banking, ATM, etc.,
certain minimum details of that cheque (like date, name of the beneficiary / payee,
amount, etc.) to the drawee bank, details of which are cross checked with the
presented cheque by CTS. Any discrepancy is flagged by CTS to the drawee bank
and presenting bank, who would take redressal measures.
3. National Payments Corporation of India (NPCI) shall develop the facility of
Positive Pay in CTS and make it available to participant banks. Banks, in turn, shall
enable it for all account holders issuing cheques for amounts of ₹50,000 and above.
While availing of this facility is at the discretion of the account holder, banks may
consider making it mandatory in case of cheques for amounts of ₹5,00,000 and above.
4. Only those cheques which are compliant with above instructions will be
accepted under dispute resolution mechanism at the CTS grids. Member banks may
implement similar arrangements for cheques cleared / collected outside CTS as well.
भुगतान और िनपटान �णाली िवभाग, क��ीय कायार्लय, 14वी मंिजल, क��ीय कायार्लय भवन,शहीद भगत �संह मागर्, फोट,र् मुम्बई - 400001
फोन Tel: (91-22) 2260 1000; फैक् स Fax: (91-22) 2265 9566; ई मेल-e-mail : cgmdpssco@rbi.org.in
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai -
400001
�हदं ी आसान ह,ै इसका �योग बढ़ाइए5. Banks are advised to create adequate awareness among their customers on
features of Positive Pay System through SMS alerts, display in branches, ATMs as
well as through their web-site and internet banking.
6. Positive Pay System shall be implemented from January 01, 2021.
7. This directive is issued under Section 10 (2) read with Section 18 of Payment
and Settlement Systems Act, 2007 (Act 51 of 2007).
Yours faithfully
(P Vasudevan)
Chief General Manager
भुगतान और िनपटान �णाली िवभाग, क��ीय कायार्लय, 14वी मंिजल, क��ीय कायार्लय भवन,शहीद भगत �संह मागर्, फोट,र् मुम्बई - 400001
फोन Tel: (91-22) 2260 1000; फैक् स Fax: (91-22) 2265 9566; ई मेल-e-mail : cgmdpssco@rbi.org.in
Department of Payment and Settlement Systems, Central Office, 14th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai -
400001
�हदं ी आसान ह,ै इसका �योग बढ़ाइए