What is the Positive Pay System for large value cheques? State briefly the procedure for its functioning.

The concept of Positive Pay involves a process of reconfirming key details of large value cheques. Under this process, the issuer of the cheque (drawer) submits electronically, through channels like SMS, mobile application, internet banking, ATM, etc. with 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 Cheque Truncation System (CTS). Any discrepancy is flagged by CTS to the drawee bank and presenting bank, who would take redressal measures. National Payments Corporation of India (NPCI) developed the facility of Positive Pay in CTS and made available to participant banks. Banks enabled it for all account holders issuing cheques for amounts of ₹ 50,000 and above. The availment of this facility is at the discretion of the account holder, banks may consider making it mandatory in case of cheques for amounts of ₹ 5,00,000 and above. Banks are advised to create adequate awareness among their customers on features of Positive Pay System through SMS alerts, display in branches, ATMs as well as through their web-site and internet banking.