• The Reserve Bank of India is to introduce “Positive Pay System” from January 1, 2021 for cheque transactions above Rs 50,000.
• This is to be done to enhance safety and eliminate frauds.
• Positive Pay System is a process of reconfirming key details of large-value cheques.
• The large value cheques are those where the transactions are above 50,000 INR.
• It basically involves reconfirmation of key details of cheques. It is not mandatory for the banks to implement the system.
• The cheque issuer electronically submits certain details of the cheque to the bank via SMS, ATM, mobile app, etc. These are cross checked by the Cheque Truncation System and discrepancies are flagged to the drawee and presenting banks. The facility is to be developed by the National Payments Corporation of India. 

Dispute Redressal Mechanism

• Only the cheques that are compliant with the new system are accepted under the Dispute Redressal mechanism. The member banks shall implement similar arrangements for cheques collected outside the Cheque Truncation System as well.

Share of Positive Pay system

• The Cheque Truncation System is currently available all over India. It presently covers 2% of the retail payment in terms of volume and 15% of the retail payment in terms of value.