The Cheque payments rule of a positive pay system will come into effect from January 1, 2021. 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 Rs 5 lakh and above.
The positive pay system is an extremely effective way to prevent check fraud. Some banks also accept files from submitting companies that contain the name of the payee for each check, which should prevent someone from illegally altering the name of the payee and having the payee issue payment to the altered entity. Payment adjustments are budget neutral and made on a sliding scale. To maintain budget neutrality, physicians with higher final scores may be eligible for a positive payment adjustment up to three times the baseline positive payment adjustment for a given year.
Under the process of Positive Pay, the issuer of the cheque submits electronically, through channels like SMS, mobile app, internet banking, ATM, etc., certain minimum details of that cheque to the drawee bank, details of which are cross-checked with the presented cheque by CTS.
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