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Understanding Positive Pay System necessary to encash cheques from August 1


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The Reserve Bank of India (RBI) has made it mandatory for cheques worth Rs 5 lakh or above to follow the Positive Pay System (CPPS) to be encashed. If the rules are not followed, the banks are allowed to refuse clearance of such cheques. Several banks including the Bank of Baroda (BoB) and the State Bank of India (SBI) have issued notifications to help the customers complete the PPS formalities.



What is the Positive Pay System?


“The concept of Positive Pay involves a process of reconfirming key details of large value cheques. Under this process, the issuer of the cheque submits electronically, through channels like SMS, mobile app, internet banking, ATM, etc., certain minimum details of that cheque (like date, name of the beneficiary/payee, amount, etc.) to the drawee bank, details of which are cross-checked with the presented cheque by CTS,” the RBI website reads.


Under this, the person who issues a high-value cheque will be required to submit the details including the date of issuance, name of beneficiary etc to the drawee bank. This can be submitted electronically via email, mobile banking app, and internet banking.


Later, when the cheque is presented to another bank for payment processing, the details will be verified. If the details match, the return will be given to the depositor. Otherwise, the cheque will be returned unpaid.


This process is developed by the National Payments Corporation of India (NPCI).


What is a ‘high-value cheque’?


Under the PPS, the RBI had said that the cheques for amounts of Rs 50,000 and above will have to be compliant with the PPS. However, it was not made mandatory. This rule came into effect on January 1, 2021.


“While availing of this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of Rs 5,00,000 and above”, the RBI had added.


Following this, several banks have set the limit of Rs 5 lakh or above for mandatory PPS registration, effective August 1, 2022.


BoB issued a notification saying, “As per the RBI directive, Positive Pay System (CPPS) will be mandatory w.e.f. 01.08.2022 for cheques issued for Rs 5 lakh & above. Such cheques will be rejected w.e.f. 01.08.2022 if Positive Pay confirmation is not provided.”


Which details are required to be furnished with the bank?


  1. Account number

  2. Cheque number

  3. Date of cheque

  4. Amount

  5. Transaction code

  6. Beneficiary name

  7. MICR code


How can SBI customers register under PPS?


  1. Go to retail.onlinesbi.com and under the ‘Personal Banking’ section, click on ‘Login’

  2. Click on ‘Continue to Login’

  3. Enter the Username, Password and Captcha and click on ‘Login’

  4. Enter the OTP received on the registered mobile number and click on ‘Submit’

  5. Click on ‘Request & Enquiries’ on the home page

  6. Click on ‘Cheque Book Services’

  7. Select ‘Positive Pay System’

  8. Under the ‘Registration’ tab, select the account number and press ‘Submit’

  9. Verify the details on the screen and click on ‘Confirm’

  10. Enter the OTP received and click on ‘Confirm’

  11. A message saying that the process is successful will be displayed on the screen.

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