By Raju Vernekar
Mumbai, Dec 14:
The Reserve Bank of India (RBI) decided to introduce the ‘positive pay system’ from first January 2021, under which re-confirmation of key details will be needed for payments beyond Rs.50,000, to ensure consumer safety and lower the cases of fraud in cheque payment.
“ Positive Pay system” is an automated fraud detection tool that matches specific information related to the cheque presented for clearing, such as the cheque number, cheque date, payee name, account number, amount, and other details against a list of cheques previously authorized and issued by the issuer. National Payments Corporation of India (NPCI) shall develop the facility of Positive Pay in the Cheque Truncation System (CTS) and make it available to participant banks. Banks, in turn, shall enable it for all account holders issuing cheques for amounts of Rs.50,000 and above.
Under this process, the issuer of the cheque will submit certain minimum details of that cheque like date, name of the beneficiary / payee, amount, etc. to the drawee bank electronically, through channels like SMS, mobile app, internet banking, ATM, etc. The details will be uploaded by the bank’s system into the centralized data system of Positive Pay. When the cheque is received by the bank, it will verify the details from the central database and make the payment if the details which the account holder has provided match those on the cheque. In case of a mismatch, the bank will reject the cheque.
Although availing this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of Rs.5,00,000 and above. RBI has advised banks 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.
In the meanwhile the Real Time Gross Settlement System (RTGS) became operational 24×7, from today. “India has become one of the few countries in the world to operate its RTGS system round the clock throughout the year,” the RBI said in a statement. The announcement came days after RBI Governor Shaktikanta Das announced the change in the recently held Monetary Policy Committee meeting.
The RTGS system is primarily meant for high-value transactions. It happens on a real-time basis. The minimum amount to be remitted through RTGS is Rs.2 lakh with no maximum limit. In this transfer, the beneficiary bank receives the instruction to transfer funds immediately when one carries out the transaction, and the transfer is instantaneous.
From July 2019, RBI stopped levying charges on transactions through NEFT and RTGS, with an aim to promote digital transactions in the country. RTGS, which began its operations on 26 March, 2004 with a soft launch involving four banks, at present handles 6.35 lakh transactions daily for a value of Rs.4.17 lakh crore across 237 participant banks.
The average ticket size for RTGS in November 2020 was Rs.57.96 lakh making it a truly large value payment system. RTGS uses ISO 20022 format which is the best-in-class messaging standard for financial transactions. The feature of positive confirmation for credit to beneficiary accounts is also available in RTGS.