How to write a Cheque in India? (The Right Way)

How to write a Cheque in India? (The Right Way)

Writing cheque seems really easy and straightforward, but is it actually that simple? One of the most common ways of paying money is through a cheque. As the era is changing, there is an immense advancement in technology people have started using electronic methods for payment.

Still, it is vital to know about the basics and the common errors that we do while writing a cheque. There are a lot of basic things that we might overlook while issuing a cheque to someone that can be easily misused.

Therefore, various measures should be kept into consideration whenever you write a cheque in India.

What is Cheque?

It is a process that enables people to access the funds in their bank accounts. It orders a bank to pay a specific amount of money from one person or company account to other individuals or companies’ accounts. It can be used to both withdraw and transfer the amount.

With the help of cheque, you can make safe, secure, and convenient payments. The best part about using the cheque is that it is a reliable option as hard cash is not involved, so the fear of lost or stolen is less. But you must be careful while writing a cheque as even one mistake can lead you to unnecessary trouble.

Understanding various parts of the cheque

Understanding various parts of the cheque

You need to understand the different elements of the cheque to make sure that the cheque is written correctly. Here are some of the essential parts of the cheque-

  1. Name of the bank is also called the drawee bank or payee bank
  2. If there is a crossing on it and written a/c payee only, it is a directive to the bank to pay in the account of payee only.
  3. In the pay section, you need to mention the name of the payee for whom you are making the cheque. Make sure that the name is spelt correctly. It is always advised to draw a line on the space after writing the payee’s name so that no changes can be made to the title.
  4. In the date section, mention the date on which you want the money to be debited or transferred.
  5. You should always cross the or bearer option so that if the cheque is stolen, it cannot be paid.
  6. You should mention the amount here in words and draw a line after the figure is mentioned. Write the amount close to the bank. Also, ensure that the amount written in words and numbers are the same as if they do not tally then the cheque might return.
  7. Write the amount in numbers and make sure to draw a line after the amount to ensure no one can make changes.
  8. Do your authorized signature as a drawer.
  9. Every cheque has a different serial number. It is called Cheque Number.
  10. Account number of the cheque issue is mentioned here.
  11. MICR code is the Magnetic Link Character Recognition Code. It indicates the bank and branch from where the cheque is issued.
  12. These two digits are the transaction ID.

These are all the things that a cheque possesses, so be vigilant while writing to avoid any kind of unwanted trouble. Let us learn the right ways to write a cheque in India:

7 Correct Ways to Write a Cheque in India

1. Cancel the words “or bearer” and a/c payee

If you omit the words a/c payee and or bearer on the cheque it assures that no one except the drawee can withdraw the money from the bank.

If you do not cancel it, then it becomes a bearer cheque, and anyone who has the cheque can claim the money. Hence, in this situation, if the cheque is lost or stolen, then there are chances that you would lose the funds mentioned in the cheque as anyone can profess it.

2. Avoid Leaving spaces between words and numbers

When you write the name of the receiver and amount, ensure that you do not leave any spaces. It is a no-brainier, and do remember this every time you fill a cheque as it gives a chance to add any alphabet or number and change the cheque.

Following this is vital as it does not give anyone a chance to fill the alphabets before or after the name. Let us understand this by an example,

If you wanted to pay the amount to Anu Malhotra, you mention the name and leave some space. Anyone can misuse it and write Anuj Malhotra, but if you leave less space, then it would become difficult to add another alphabet.

Correct way- Anu Malhotra

Wrong-way- Anu   Malhotra

It can be misused and rewritten- Anuj Malhotra.

3. Do not forget to write only after writing the amount in words in rupees column

These things might sound small but has a significant impact. It is paramount for you to write only after you fill the amount in words and putting a slash after writing the numbers. There is a big difference between Rs.15,000 and Rs.15,000/. The reason behind placing a slash is that no one can add any digit after it, but if you just write 15, 000 anyone can make it 15,0000 and can misuse it.

Also, writing only is essential as if you just write fifteen thousand, then anyone can add fifteen thousand and hundred ninety-nine only. Thus, if you do not follow this tip, the amounts can be easily tweaked, which might create a difficult situation for you.

Thus the write way of mentioning the amount is- Fifteen Thousand only and 15,000/-

Also Read: The Charges & Penalty under Cheque Bounce

4. Never sign on MICR band

Don’t sign on or over the MICR band at the bottom of the cheque. MICR band is the bank’s related numeric written on the bottom of the cheque. Thus, signing on the MICR band is absolutely wrong, and because of this, your cheque can be dishonoured.

In fact, this is one of the most fundamental mistakes because of which the cheque gets defiled. You should always ensure that you sign on the space that is provided above the Authorized Signatory.

5. Correct Date

Do not forget to fill the correct date as if you forget to fill the date, anyone who possesses the cheque can put any date and take out the money as per their will. This can be big trouble for you if you do not have enough balance in the account at the time when the cheque is put in the bank.

If you do not have enough money in the bank, then your cheque would be dishonoured. On the other hand, a cheque without a date is also not accepted by the bank, and it gets bounced anyways. Also, make sure that you write the correct date and year as it can also lead the cheque to get cancelled.

6. Overwriting should not be done

You should be very careful while writing a cheque so that you do not have to rewrite, scribble, or cancel anything. The bank usually does not accept cheques where overwriting is done. In case, if you make any mistake, then you should cancel the existing one and write a new one.

7. Always keep a record of your cheques

It might sound boring to you, but it is considered to be a good habit of keeping a record of the cheques that you issue to any third party. You just need to note the cheque number, name of the payee, and date when you issued it.

This ensures your cheque safety as with the help of this information, and you can avoid any sort of suspicious activity, confusion, or fraud.

Also, there can be a situation when you wish to cancel the cheque but do not have details, but if you have the record of the information, then you can do it quickly without much hassle.

These were a few steps that you need to take care of while writing a cheque so that no fraud can happen, plus your cheque does not get dishonoured.

Still, there are some more tips and common mistakes that many people do. Let us have a look at them so that they can save you from them.

Also Read: Savings Account vs Current Account

6 Essentials tips to remember when writing a Cheque in India

1. Add a line after the name and amount: It is advisable to draw a line after your write your name or amount as it assures that no one can add anything on the cheque, and it cannot be misused.

2. Write the date on the upper right-hand corner: You would be able to see a space next to the word date printed on the cheque. As you must be aware that cheque is a legal document so ensure that the date that you mention on the upper right corner of the cheque should tally with the date that you sign at the bottom of the cheque

3. Signature: Sign your cheque carefully as it should be the same signature that you provided the bank while opening your account if the signature does not match then you might have to reissue the cheque

4. Use the full name: Whenever you wrote a cheque always mention the full name of the person and do not use abbreviations or nicknames

5. Do not sign on a blank cheque: Most of you must be aware of this fact that you should never sign a blank cheque. It can be really dangerous for you as anyone who gets this blank sign can fill the amount as per their will and can empty your account. Never do this mistake as it can lead to withdrawing a huge amount from your bank.

6. Sign on the designated place: Another critical thing to remember is that you should always sign on the specific line that is printed at the bottom right corner of the cheque. If the cheque is not signed correctly and at the right place, then it might get cancelled.

General Safety Measures for writing a cheque correctly

Issuing a cheque might seem an easy job, but one mistake can lead to a considerable loss. Hence taking safety measures, it not only important but essential. Below mentioned is the list of few extra steps that you need to consider while writing a cheque-

  • You can also put a cello tape on the name and amount so that no one can make any alterations on it
  • If you have any cancelled cheque then make a habit of destroying them unless you are using them for any particular reason
  • Always mention your mobile number and account number on the backside of the cheque while depositing
  • Do not provide a cheque to anyone without mentioning date, name and account number
  • Also, make sure that you have enough balance before handing over the cheque because if the cheque bounces it is considered as a criminal offence
  • The sign clearly and if you think that it is not clear then sign again to avoid any confusion
  • You should never fold, staple, disfigure or stick the MICR band
  • Cheque should never be post-dated and should not have any dirty marks on it
  • Use the same pen throughout the cheque, and the handwriting should also be consistent on all parts of the cheque.

FAQ’s

Q1) What is a transfer cheque?

A cheque issued by the same bank account holder and also deposited by the account holder of the same bank is a transfer cheque. If you deposit a cheque across the different counter of the branch, then it might take 2 to 3 working days for the amount to get credited.

On the other hand, if it is deposited in the dropbox of the same branch or ATM, then it would be credited the same day.

Q2) When does a bank dishonour or cancels the cheque?

There are various cases when the bank can cancel your cheque, and the situation is even worse when the cheque gets bounced. You should always make sure that the transactions are smooth, and this situation does not arise. Here are a few cases where the cheque gets dishonoured-

  • If you do not fill your cheque properly
  • Insufficient funds in your account
  • A cheque is outdated this means that the date mentioned on it is more than 3 months old
  • Overwritten or scribbled cheque
  • Issuer’s signature does not tally with the one which you did while opening the account

Q3) How can I update my mobile number for alerts?

For registering or changing your mobile number, you can submit a letter signed by authorized signatories at your bank branch.

Q4) Is it possible to stop the payment of the cheque? If yes, how?

Yes, it is possible to stop the payment, and it is an easy process. You just need to call your bank with sufficient specifics to identify the cheque, or you can also write to your bank about the same with the details of the cheque.

Recommended: 15 Best Debit Cards In India (2020)

Different banks have different guidelines regarding the filling of the cheque; perhaps you should also read your bank’s guidelines before filling the cheque. So, next time when you write a cheque, make sure that you follow the steps and tips mentioned above to avoid any sort of error.

Also, using these tips would minimize the chances of any misuse, fraud, or cancellation of your cheque. While writing a cheque ensure that you are vigilant and careful as one small mistake can lead to a panic situation. So be wise and be rich.

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