In December 2020 RBI had announced that they will introduce a new method for cheque clearance, that is the positive pay system. It was all discussed earlier, but you know the Indian systems have their own cool time to implement. I think the fast tag system took more time to be implemented after the announcement. So now after 6 months of cool-down period and Covid problem, from June 1st, 2021, banks are going to implement Centralized Positive Pay System (CPPS).
New Rules From January 2021
So what is CPPS?
Centralized Positive Pay System works on the principle of data reconfirmation. Once you issue a cheque worth Rs 50,000. You have to give the cheque details to CPPS through SMS, mobile banking, or internet banking. So once the issued cheque comes to the CPPS, the department will verify all the information before passing the cheque.
CPPS is going to be a part of the existing Cheque Truncating System ( CTS) . CTS is a centralized cheque clearing department that coordinates payments via cheque.
This is going to be a tiresome process for people who issues cheque on daily basis. Because they have to fill the cheque and also send the details to CPPS. If the details are not found in the system, the payment will not be processed.
Banks like ICICI are already following the positive pay system to bring in safety for their transactions.
RBI has introduced this process to minimize the cheque based financial frauds.
Nowadays, most people prefer electronic transfers and instant payment services. That will give them instant credit in their account, rather than waiting 1 or 2 days for cheque clearance.
These safety measures and check points will scrutinize the frauds, and helps to stay ahead of criminals.
Stay tuned…..