What is the Positive Pay System (PPS)?

Posted on Wednesday, November 13th, 2024 | By IndusInd Bank

Cheque fraud is a significant risk in financial transactions. Common types of cheque fraud include forgery, where a fraudster forges someone else’s signature; cheque alteration, where legitimate cheque details are changed to benefit the fraudster; and counterfeit cheques, which are entirely fabricated to mimic genuine ones. These types of fraud can have severe financial consequences, especially if not detected early.

The Reserve Bank of India (RBI) introduced the Positive Pay System (PPS) on January 1, 2021, as a measure to combat fraud perpetrated through cheque tampering/alteration and protect account holders.

Keep reading to know more about PPS, how it’s implemented, its advantages, and ways to easily submit your cheque details online.

What is the Positive Pay System Exactly?

To explain ‘what is PPS’ in simple words, consider it a fraud detection tool introduced by the RBI to increase the safety of cheque-based transactions.

It involves double-checking the details and authenticity of a cheque before it is processed for payment. This pre-verification step ensures that only genuine cheques issued by the account holder are processed.

How Does PPS Work?

PPS operates on a simple mechanism:

Issuance of cheque: You submit the cheque details electronically to the bank. The details usually include the cheque number, date, payee name, account number, amount, and an image of the cheque. These details can be shared through various channels, such as internet banking, mobile banking, email, or by visiting a bank branch in person.

Verification process: When the cheque is presented for clearing, the bank’s system verifies these details against the one provided during issuance.

Clearing the cheque: If all the details match, the cheque is cleared, and the payment is made to the beneficiary. If there are any discrepancies, the cheque will be flagged, and no funds will be debited from your bank account until further review.

PPS | Mandatory or Voluntary?

PPS in India functions on a mixed basis—both mandatory and voluntary, depending on the cheque amount involved. For cheques valued at ₹50,000 and above, account holders have the option to choose whether or not to use this service. However, for cheques exceeding ₹5 lakh, banks may decide to make PPS mandatory.

PPS adds an extra layer of scrutiny to high-value transactions and protects both the bank and the customer from significant financial losses.

How to Submit/Confirm High-Value Cheque Details Online

Submitting high-value cheque details is simple and quick with IndusInd Bank. Let’s say you have an IndusInd Bank Indus Delite Savings Account and want to submit cheque details.

Here are different methods to do that:

Online  

• Login to IndusMobile or IndusNet
• Navigate to the Service Requests tab, find the Account Request section, and click on Positive Pay
• Choose your account, enter the threshold amount, and then submit the cheque details

Offline 

• Download the Positive Pay Form
• Complete it with the relevant cheque issuance details
• Submit it at your nearest branch or send it via email

Look at the additional benefits of opening this zero-balance savings account online:

Open a savings account with IndusInd Bank today! Choose your unique account number and start enjoying exclusive benefits now!

Also Read: Steps to be Taken If Your Bank Account is Frozen

Key Takeaways

The Positive Pay System is a crucial security measure adopted by banks. Through a detailed verification of cheque information before approval, PPS eliminates the risk of forgery, alterations, and other fraudulent modifications.

To get a highly secure and feature-rich banking experience, open the Indus Delite Savings Account. This digital savings account requires no minimum balance and provides both online and offline options to submit cheque details to protect your transactions and hard-earned money.

The entire account opening process is 100% digital, from the start to the end. All you have to do is choose a bank account number of your choice, enter your personal and financial details, add funds to your account, and complete video KYC at your convenience. Apply NOW!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.