Positive Pay System (PPS) is very useful in protecting against check fraud. Know how PPS works, what are its benefits and how it protects against check fraud.
New Delhi. If you are also among those who usually issue high value checks, then you should use the Positive Pay System implemented by the Reserve Bank of India. You can use PPS for checks drawn for Rs 50,000 or more. It is very useful in increasing the security of check-based transactions and reducing the risk of fraud.
The use of Positive Pay System is not mandatory. However, some banks like Bank of Baroda, HDFC Bank, Punjab National Bank and ICICI Bank have made this positive pay confirmation mandatory for checks of Rs 50,000 and above.
What is Positive Pay System
The banks of the country have implemented the Positive Pay System. RBI had issued a guideline for banks to implement the Positive Pay System from 01.01.2021. Actually, the Positive Pay System is a mechanism created by the National Payment Corporation of India (NPCI), for which customers have to provide information about the cheque being issued by them to the bank from whose account the money is to be deducted.
In this information, the customer provides the details of the cheque number, date and amount to the bank. When the cheque issued by the customer comes for clearance, the bank verifies the important details of the cheque with the information already sent. If the details given in the cheque match the information provided by the customer, then the payment is made, otherwise the cheque is sent back.
Give information at least one day in advance
Under the Positive Pay System, the person issuing the check can inform the bank about the details of the check through SMS, mobile app, net banking or ATM. Usually these details are given to the bank a day before presenting the check so that the payment process can be done smoothly. On receipt of the details, the bank verifies them with the presented check before processing the payment.
Benefits of Positive Pay System
The Positive Pay System is an effective weapon to prevent check fraud. By verifying the check details, it reduces the risk of fake checks. This further increases the security in your check payment. Another advantage of this is that the chances of check return are also reduced considerably.
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