Today in this blog we will explore workings Positive Pay System, including its verification processes of, its implementation by State Bank of India (SBI), and recommendations for secure fund transfers, shedding light on its pivotal role in enhancing banking security.
The Positive Pay System, instituted by the Reserve Bank of India (RBI), stands as a crucial measure in fortifying the security of cheque transactions and combatting fraudulent activities. This comprehensive system serves as a shield against tampering or alterations in cheques, ensuring the safety of funds involved in such transactions. Let’s delve into the intricacies of how this system operates:
1. Objective:
At its core, the positive pay system aims to eradicate cheque-related fraud by thwarting attempts at tampering or alterations. By doing so, it upholds the integrity of cheque transactions and secures the funds involved therein.
2. Process:
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Issuer’s Responsibility:
When a cheque is issued, the drawer (issuer) manually or electronically furnishes vital details of the cheque to the drawee bank. These details encompass the account number, cheque number, date, amount, and beneficiary name.
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Cross-Verification:
Upon the presentation of the cheque for payment, the bank meticulously cross-verifies the provided details through the Positive Pay System with the actual cheque details.
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Payment Decision:
If all the details are correct and genuine, the payment proceeds as usual. However, if discrepancies or any issues are detected, the cheque is promptly returned, preventing any potential fraudulent transactions.
3. Verification Requirements:
Some banks mandate the verification of cheques valued at Rs. 50,000 and above through the Positive Pay System, while others offer it as an optional service, thereby providing flexibility to customers.
4. Submission Channels:
Account holders are afforded various avenues through which they can submit positive pay details. These include consent through registered email, branch visits, internet banking or mobile banking platforms, catering to diverse customer preferences and accessibility. In the last of this post we have mentioned some popular alternate channels may be used in SBI
5. Timing:
To ensure seamless verification, it is advisable for positive pay details to be submitted at least a day before the cheque presentation by the payee. This proactive approach minimizes the risk of delays or discrepancies in the verification process.
6. Language Requirement:
As cheque transaction system is designed for educated customers so it is imperative that positive pay details are submitted in English, ensuring uniformity and clarity in the verification process across different banking platforms.
Additionally, it is prudent to explore alternative payment methods such as RTGS or NEFT for high-value fund transfers, offering added layers of security and efficiency.
Implementation by State Bank of India (SBI):
In accordance with RBI directives, the State Bank of India (SBI) has implemented the Positive Pay System (PPS) for all cheque payments, effective from 01.01.2021. This system entails customers reaffirming key cheque details to the bank, which are subsequently cross-checked during payment processing.
Implementation Process at SBI:
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Account Registration:
Customers are required to register their cheque-operated accounts for the Positive Pay System through various channels such as branches, internet banking, and mobile banking platforms. The registration process entails submitting an application in the prescribed format. Application form will be provided by us separately.
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Potential Mandatory Requirement:
The bank may soon make the positive pay system mandatory for specific cheque amounts, underscoring its commitment to enhancing security measures.
Though we tried our best to guide you about Positive Pay System yet for any other guidance or assistance, individuals can reach out to their nearest branch or contact the bank’s dedicated Customer Service Centre i.e. at 1800 11 2211 in SBI .
Additionally, alternate channels for Positive Pay System registration are provided for enhanced accessibility and convenience. In SBI these channels includes:
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RINB Personal Internet Banking
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CINB Corporate Internet Banking
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Mobile Banking (YONO Lite)
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YONO SBI Mobile App
In conclusion, the Positive Pay System emerges as a pivotal tool in safeguarding customer’s hard-earned money through safe cheque transactions, bolstering security measures, and instilling trust and confidence in the banking ecosystem.
Read More : SBI Online Banking Password Reset
FAQs :
1. What is Positive Pay System?
The Positive Pay System is a security measure to prevent cheque fraud by verifying cheque details during payment processing.
What’s the primary objective of the Positive Pay System?
It aims to prevent cheque fraud by verifying details against alterations or tampering.
How does PPS verify cheque details?
Through cross-verification during payment processing.
Are there specific verification requirements?
Some banks mandate it for cheques valued at Rs. 50,000 and above.
What are the submission channels for positive pay details
They include registered email, branch visits, internet banking, or mobile banking platforms.
Is there a language requirement for submission?
Yes, positive pay details must be in English for clarity.