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RBI to launch ‘Positive Pay System’ for Cheque Truncation System

Published on September 29, 2020
Current Context: The Reserve Bank of India is set to introduce ‘Positive Pay System’ for Cheque Truncation System (CTS).
RBI to launch ‘Positive Pay System’ for Cheque Truncation System
  • For this purpose, RBI has issued directive under Section 10 (2) read with Section 18 of the Payments and Settlement System Act 2007.
  • RBI will start this ‘Positive Pay System’ from 1st January 2021.
  • The ‘Positive Pay System’ is announced in order to prevent frauds related to bank cheques. 
  • The system will developed by National Payment Corporation of India (NPCI).
  • All the banks will have to enable the system for all account holders issuing cheques for amount of Rs 50,000 and above. 
  • However, the usage of this system is as per the choice of account holder, but banks may make it compulsory in case of cheques pertaining to the amount of Rs 5 lakhs and above. 
  • Working Mechanism of ‘Positive Pay System’: Under this system, the issuer of the cheque will have to submit details of cheque like date, name of the beneficiary, payee and amount. Further, all these details will be cross verified before the cheque is presented for payment. In case if any discrepancy is found by CTS to the drawee and presenting bank, redressal measured will be taken.
  • Static Part: 
    • HQ of RBI: Mumbai
    • Governor of RBI: Shaktikanta Das
    • HQ of NPCI: Mumbai


Q.1 RBI has decided to implement ‘Positive Pay System’ for which of the following purpose?
a. Identification of fake currency notes
b. Frauds related to cheques
c. Frauds related to online bank transactions
d. Frauds in the credit or debit cards 

Q.2 The RBI’s ‘Positive Pay System’ to identify cheques frauds is applicable for all account holders issuing cheques for amount of Rs ­­____ and above?
a. Rs 70,000
b. Rs 20,000
c. Rs 50,000
d. Rs 80,000

Q.3 From when RBI has decided to roll out ‘Positive Pay System’? 
a. 1st January 2021
b. 1st October 2020
c. 1st April 2021 
d. 1st December 2020
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