Be careful when writing cheques.
The casual writing of cheques and commiting mistakes may invite difficulties now according to new directions issued by the Reserve Bank of India.
We generally have a tendency of writing the cheques very casually and at times because of this we commit mistakes too. If this mistake is noticed we correct it and issue the said cheque to the payee. This habit of correcting or over writing the cheques in terms of name or amount in words or amount in figures or date, is a very common thing. However the banks have been kind enough to allow such mistakes so long as the over writings are authenticated by signing over such corrections.
The banking regulator, Reserve Bank of India (RBI) has lately issued guidelines in order to enhance the security features in cheque forms, which is the most widely used paper based mode of payment. (An estimate says that five million or more cheques get cleared every day in India).
It has to be remembered that a few years back security features in cheque forms have been standardised with MICR system which facilitated the processing of cheques. 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.
As per the 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.
It is very clear that these measures are useful and help the banking system to identify and control fraudulent alterations on cheques. It also help creating a cheque writing discipline amongst the bank customers. In case there is a need to make alterations in the written cheque, it is better 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.
Very informative write up.
Huge bank customers are still ignorant in major part of our country due to lack of awareness in banking operations.
Banks are spreading their business operations in remote villages.
So awareness program in safe banking operation should be initiated first by banks.