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Best Practices of writing Cheques

Almost every one of us use cheques extensively to make payments for utility bills, insurance payments etc. Most of us often make inadvertent errors which may even make a cheque invalid.

The following is a step-by-step process that can be followed to minimize the chances of any mistakes appearing in your cheque.

Step 1: Start writing a cheque by entering the date of the cheque. Enter a future date if you want the payee (the one to whom you make the payment) to realize the amount in the future. You can enter other date if you want the payee to realize the cheque amount immediately. However, Please be reminded that a bank cheque in India is valid only for 3 months from the date mentioned in the cheque.

Step 2: On the space provided after the word “PAY” enter the name of payee (the person or the Company to whom you want the payment to be made). Select “BEARER” only if you want the payee to encash the cheque immediately on presenting the cheque to the bank. If you don’t want to use the “BEARER” option, strike off the word.

Step 3: In the space provided near “RUPEES”, write the amount to be mentioned in the cheque in words. It is advisable to check your bank balance first before writing the amount. This will help you avoid writing a cheque for an amount which far exceeds your bank balance. It is a good practice to avoid leaving any empty space in this space. Draw a straight line immediately after the end of the sentence in the space provided for writing the amount in words.

Step 4: Now write the amount in numbers in the box provided in the cheque for this purpose. At the end of the amount, draw a “ /-“ sign to avoid any possible tampering. Pasting a cello tape over the amount in this space also helps avoid any possible tampering.

Step 5: A Payee can either encash a cheque or get the cheque amount credited in his bank account. If you want the payment to be made only to the payee’s account, then draw two simple parallel lines on the top left of the cheque. In between those parallel lines write “ A/C PAYEE ONLY”. This is an instruction to your banker to credit the amount in the cheque to payee’s bank a/c and not to make cash to the payee over the counter.

Step 6: Last but not the least; put your signature on the bottom of the right of the cheque. As far as possible, try to put your signature in the same way as you did while opening your bank account.

Though banks allow any change or variations in the signature due to health reasons or old age, it is advisable to put your signature right the first time to avoid any disputes in the future.

By following the best practices of writing a cheque as given above, you can ensure that your cheques are correctly written and minimize the chances of your cheques getting rejected due to simple oversight errors.

CTS – 2010 Cheques

CTS – 2010 Cheques Information

What is Cheque Truncation System (CTS – 2010):  

Simply put, CTS is a process that will give banks the freedom to avoid transporting a physical cheque from the presenting bank (where the cheque is deposited) to the drawee bank (where it is issued). As per the CTS, instead of a physical cheque, an electronic image of the cheque will be sent to the drawee bank. Of course, this image will have all the necessary information needed to process the cheque. Right from the nine-digit MICR code, the date of the cheque and the details of the presenting bank, like branch, etc.

What’s the big deal about it

Faster: Since the cheque will not actually move from one location to another, the time needed to clear the cheque will be lesser. So, if an inter-city cheque takes anywhere from three to seven days (at time more) to get cleared, with CTS it will take a maximum of a couple of days; at times, even it might get cleared the same day.

Curtail Loss: When a cheque has to be moved physically, it can get damaged or worse even get lost in transit. CTS would take care of such issues.

What should you do:

Request: First get in touch with your bank, give them the Non-CTS cheques for cancellation and request the new kind of cheques. That is, CTS 2010 standard cheques.

Ink: Also, keep in mind that going forward, when you write the cheque you should use darker ink so that your signature is captured by the software properly.

Be careful: Also, when you fill the cheque you will need to be extra careful. If you make any alterations in the cheque, your cheque will simply not be cleared; this is to ensure that the risk of fraud is reduced. Which means you will have to use a new cheque leaf if you make a mistake. And the fact that many banks are charging for extra cheques means you might just have to bear the extra cheque costs too.

The RBI plans to have this new system implemented across all banks. So get yourself at least one pen with darker ink.