Positive Pay System in SBI, PNB, and Other Banks: How It Prevents Cheque Frauds
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With rising cheque fraud cases, banks are stepping up security. The Positive Pay System (PPS), introduced by the Reserve Bank of India in 2021, offers a robust mechanism to safeguard high-value cheques. This initiative enhances protection for individuals and businesses alike. Here's how PPS works and why it's essential.
What Is Positive Pay System?
The Positive Pay System is a fraud detection feature designed for cheques valued at ₹50,000 and above. When issuing a cheque, users share its key details - such as the cheque number, date, payee name, amount, and account details—with the bank electronically.
This allows the bank to cross-verify the details when the cheque is presented for clearance, ensuring transactions are legitimate and reducing the risk of fraud.
How Does It Work?
Why Use Positive Pay?
Key Details to Remember
How to Register for PPS?
Banks have streamlined the registration process. For example, State Bank of India (SBI) offers multiple methods:
When registering, customers can set account-specific thresholds based on their risk levels. For large cheques, the system is mandatory - ₹5 lakhs for savings accounts and ₹10 lakhs for current accounts, overdrafts, and similar accounts.
The Bottom Line
The Positive Pay System is a game-changer in cheque transaction security. By actively sharing cheque details with your bank, you can safeguard your funds and enjoy hassle-free, secure transactions. Stay proactive and shield yourself against fraud today!
What Is Positive Pay System?
The Positive Pay System is a fraud detection feature designed for cheques valued at ₹50,000 and above. When issuing a cheque, users share its key details - such as the cheque number, date, payee name, amount, and account details—with the bank electronically.
This allows the bank to cross-verify the details when the cheque is presented for clearance, ensuring transactions are legitimate and reducing the risk of fraud.
How Does It Work?
- Write a Cheque: Issue a cheque for ₹50,000 or more.
- Share Cheque Details: Submit key information to your bank via internet banking, mobile apps, SMS, or by visiting the branch.
- Bank Verification: The bank compares your provided details with the cheque presented by the beneficiary.
- Clearance or Flagging: If details match, the cheque clears. Discrepancies raise alerts, preventing fraud.
Why Use Positive Pay?
- Minimises Fraud: Ensures no unauthorized changes are made to cheque details.
- Boosts Security: Adds an extra layer of protection to your transactions.
- Quickens Clearing: Resolves potential issues before clearance.
- Peace of Mind: Provides confidence in large cheque transactions.
Key Details to Remember
- Mandatory for Large Cheques: Cheques over ₹5 lakhs require Positive Pay; it’s optional for those between ₹50,000 and ₹5 lakhs.
- One-Time Registration: Register for PPS through your bank’s prescribed format or digital platforms.
- Non-Modifiable Entries: Once cheque details are submitted, they can’t be edited or deleted.
How to Register for PPS?
Banks have streamlined the registration process. For example, State Bank of India (SBI) offers multiple methods:
- Digital Channels: Register through SBI’s internet banking portals (RINB/CINB), YONO app, or YONO Lite.
- At Branches: Submit the prescribed form to activate Positive Pay for your account.
When registering, customers can set account-specific thresholds based on their risk levels. For large cheques, the system is mandatory - ₹5 lakhs for savings accounts and ₹10 lakhs for current accounts, overdrafts, and similar accounts.
The Bottom Line
The Positive Pay System is a game-changer in cheque transaction security. By actively sharing cheque details with your bank, you can safeguard your funds and enjoy hassle-free, secure transactions. Stay proactive and shield yourself against fraud today!
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