Dr. Sanjiv Agarwal
The cheque writing will not be so easy and casual again. All of us do write cheques and issue the same to our creditors, suppliers or to those whom we owe some money – loan to friends, investment in shares, payment of salary, payment of hotel bills or even medical bills or tax payment, cheque comes as a handy tool to pay the money.
We are generally in a habit of casually writing the cheques and at times commit mistakes which we rightfully correct also and issue the said cheque to the payee. This habit of over writing the cheques in terms of name or amount in words or amount in figures or date, all is done very casually and banks have been kind enough to allow such mistakes so long as the over writings are authenticated by signing over such correction. The banking regulator, Reserve Bank of India (RBI) has lately issued guidelines enhancing the security features in cheque forms, which is the most widely used paper based mode of payment. (Over five million cheques get cleared every day in India).
Over a period, security features in cheque forms have been standardised with MICR system which has facilitated processing. The other security measures include quality of paper, water mark, bank’s logo on the cheque in invisible ink, void pantograph and standardised field placement on cheques.
According to new guidelines, it will be mandatory for banks to issue cheques with preprinted account numbers and some extra security systems such as fugitive ink, security thread, holograms etc. Also, any person writing a cheque for authorising a payment from his or her account will be prohibited to make any alterations or correction on the cheques. No changes or correction will be allowed to be carried out on the cheques. For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words) or signatures, a fresh cheque form will have to be used by the customers. Even the change of date will not be allowed unless it is for the purpose of validation of date. Thus, no correction or alteration on cheques will be permissible except date revalidation.
No doubt, these measures are necessary in order to help the banking system to identify and control the fraudulent alteration on cheques, it would also imbibe cheque writing discipline amongst the bank customers. In case there is a need to make alterations, it would be desirable to issue a fresh cheque instead rather than to issue cheque with over writing, even if that is authenticated. Banks would not mind debiting your account with some bank charges if such cheques are presented, besides returning the cheques without payment.
So next time when you write a cheque, do so carefully and professionally.
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This amount should be written in words :
10,00,000/00
Rupees ten hundred thousand.
Rupees one million.
Rupees ten lakh.
Hello
Is there a correct date format for writing a cheque.
for example, is the below date valid??
’29 – 6- 8′ a correct date or can it be rejected for invalid date and what are the rules governing the same?
refined;
A well thought measure though coming little too late
a well thought measure may be delayed
SOMETIME SIGNATURES OF CHEQUE WRITER MAY NOT TELLY THEREFORE HE IS IN THE HABIT OF SIGNING TWICE SO THAT BANK CAN MATCH ANY ONE SIGNATURE AND FEEL COMFORTABLE TO CLEAR SUCH CHEQUES. WILL IT BE ACCEPTABLE UNDER NEW RULES
when will this be effective.