Decoding Bank Cheque Books

Posted on Friday, May 24th, 2024 | By IndusInd Bank

The payment landscape in India has undergone a significant transformation, evolving from traditional methods like physical cheque deposits to the Unified Payments Interface (UPI). This technology facilitates real-time digital payments using UPI-enabled smartphone applications. This marks a substantial advancement in the industry. Now, sending and receiving money, bill payments, and authorising transactions are all a click away. However, many payments are still made via cheques.  

What is a Cheque? 

A cheque is a paper instrument with the name and details of the account holder printed on it. When you open a bank account, the bank issues a booklet containing these cheque leaves. Savings accounts are an example where the bank issues a cheque book at the time of account opening.   

What is a Bank Cheque Book, and Where Can You Get It? 

When you open a bank account, online or offline, the bank issues a cheque book. While this cheque book contains a limited number of cheque leaves, you can reapply for a fresh cheque book once you exhaust them. You can request a cheque book by visiting a branch in person or via online banking or mobile banking application. Upon receiving a request, the bank processes it and mails the cheque book to the customer or makes it available for pickup at the branch. Verification of identity or account ownership may be required before issuance.  

What are the Contents of a Cheque Leaf? 

As a cheque book holder, you must know about the information printed on your cheque leaf. Let’s have a look: 

• Bank’s Information: The cheque carries the name of the bank and its address. 

• IFSC: A distinctive 11-digit code comprising numbers and letters denoting the bank branch. 

• Payee Information: Ensure accurate inclusion of the payee’s name in this section. 

• Date: Fields available for filling include date, month, and year. As per the RBI rules, cheques are valid for three months from the date they are issued. Hence, this field is important. 

• Rupees: The drawer must express the amount in words in this section.  

• Account Number: The account number is printed to facilitate payment processing.  

• Signature: The drawer must appropriately sign the cheque in the assigned space. As of today, cheques are printed with the account holder’s name, above which their signature is mandatory. The signature must match the signature in the bank records. 

• Cheque Number: Every cheque is assigned a distinct cheque number and a MICR code. 

• Amount: This is the designated space where the drawer must write the amount to be transferred in numerical form. 

Also Read: How to effectively manage your savings account 

Parties Involved in a Cheque-Based Transaction 

The following parties are involved when transacting using cheques: 

• Drawer: The person who is signing/writing the cheque. 

• Drawee: The institution bridging the issuer and recipient. 

• Payee: The individual or entity receiving the specified amount on the cheque. 

Besides the usual parties, there could be more parties involved, as detailed below: 

• Cheque endorser: If any of the parties mentioned above transfers its payment acceptance rights to another entity, the latter assumes the role of a cheque endorser. 

• Cheque endorsee: The party in whose favour the right to accept the payment is transferred is called the cheque endorsee. 

Also Read: The Different Types Of Savings Accounts: Which One Is Right For You  

What are Cheque Book Charges? 

Banks offer the first cheque book for free. Subsequently, customers need to pay a fee for reissuing a cheque book. This fee varies among banks. 

Conclusion 

The bank cheque book remains a valuable tool for facilitating secure and convenient financial transactions. Despite the increasing adoption of electronic payment systems, cheque books are still relevant for they are a reliable method for transferring funds.  

Key features such as account details, built-in security measures, and clear payment instructions ensure the integrity and trustworthiness of cheque-based transactions, making them an essential component of financial record keeping.  

Click here to apply for a savings account today! 

Disclaimer:  The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the author’s views in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.