To ensure safety and security of customer’s money Bangladesh Bank introduces “Positive Pay Instruction” system for the settlement of payments through Cheque in Bangladesh Automated Clearing House (BACH) issuing a Circular by Payment System Department on 26 November 2013 (PSD Circular No.04/2013).
There is always the risk of Fake Checks, duplicate signatures, modifications in the amount/payee name/scouring in MICR lines when we give someone a check for collection through Bangladesh Automated Clearing House (BACH). It leads to the loss of customer money as well as the banker has to face the complexity of legal proceedings.
Read Also: What is Bangladesh Automated Clearing House and How it works?
In order to minimize such risk, Bangladesh Bank has implemented “Positive Pay Instruction” as a method of settlement of payments through Bangladesh Automated Clearing House (BACH).
The purpose of this article is to provide information regarding the pros and cons of “Positive Pay Instruction”.
General Rules of Positives Pay Instruction:
- For corporate/SME/proprietorship concerns, to honor a cheque placed through Bangladesh Automated Clearing House (BACH) in the case of Tk. 1,00,000/- and above “Positive Pay Instruction” is mandatory.
- For all customers i.e. Individual account, joint account. to honor a cheque placed through Bangladesh Automated Clearing House (BACH) in the case of Tk. 5,00,000/- and above “Positive Pay Instruction” is mandatory.
If the borrower fails to submit “Positive Pay Instruction” in his bank, the bank can return the which place to BACH by mentioning the reason” Advice Not Received”. And for that, the bank has no liability at all.
What a Positive Pay Instruction Contains:
Usually, a Positive Pay Instruction contains;
- Customer Account number and name.
- Name of the person or institution to whom the cheque was paid.
- Name of the bank through whom the cheque will be placed on Bangladesh Automated Clearing House (BACH).
- The amount which is mentioned on the cheque.
- The probable date on which the cheque will be placed by the mentioned bank.
- Cheque number which is paid for BACH collection.
To ensure customer safety, Bangladesh Bank has introduced “Positive Pay Instruction” but it can only be achieved with cordial customer cooperation and the bank must ensure it before paying each and every check through the Bangladesh Automated Clearing House (BACH).
Sample Format:
For More: https://www.bb.org.bd/en/index.php/mediaroom/circular