Cheque- A useful tool


Cheque is an instrument used in banking for the transfer of amount from one account to another account or to get cash directly.

A small description about the cheque-  Name of party(to whom the payment is to made)is written on top.

Amount is written in words as well as in figure, in case of descrepancy, amount in words will prevail.

Just below it bank account no is printed and on the right side name of account holder as well as joint account holder is printed, just above this drawer puts signature.

On the base six digit numbers(for ex.254682) on extreme left is the cheque no,after that followed by nine digit no(for ex.110240049), known as Micr code.
First three digit represent state,next three digit represents bank code, last three represents branch.

Two digit no extreme left represents cheque type(for ex.27 to 31 is government chq etc).
Date is written in rectangle box( Note- cheque is valid only for 3 months calculated from the date of issue).

How to check the authenticity of the cheque?                               

A genuine cheque carries watermark,that can be seen in the UV machine or visible in tube light also through naked eye, logo of the bank that too visible in UV Machine.
Color of cheque will fade in water, on photocopy VOID word is visible on strip present on left side of cheque.

Queries related to chq..

1. Why the chq is crossed on the left?                                         

Crossed chq is used only for transfer of amount in account, payee name can be written inside the crossing.
Crossed Chq cannot be cashed.     

2. What are the different reasons for the rejection (dishonor) of the chq?

-Difference in signature.
Incomplete chq.
Cutting or overwriting on date or in amount (written in words).
Incomplete chq are the main reasons for the rejection.

3. Is there any problem in issuing chq, if I don’t have pan card in my saving account?
-Yes, chq below 50k amount will be paid but chq above 50k will be rejected.

4. Wrongly filled chq will be paid or not if amount written in words and figure differs?
-Yes, in this case payment will be made as the chq is not incomplete the amount written in words will be considered.

5. What is CTS?
-CTS is termed as Chq Truncation System implemented by the banking system to make the clearing process faster.
In this system instead of sending the original chq, chq is scanned and the image file is sent to the other bank.

6. What is the difference between a  Cts & a Non-Cts cheque?   

Those cheque that are issued from 2010 having latest and additional security features are known as Cts chq.
Cts 2010 is written on the extreme left side of the cheque, date format is in rectangle shape.   

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