What is Cheque
• A Cheque is a document which orders a bank to pay a
particular amount of money from a person’s account to
another individual’s or company’s account in whose name
the cheque has been made or issued
Parties of Cheque
Bearer
Cheque
Blank Order
Cheque Cheque
Mutilated Crossed
Cheque Cheque
Ante Dated Open
Cheque Cheque
Traveller’s Post-Dated
Cheque Cheque
Stale
Cheque
Mode Of
Cheque
Payment
Cash Payment
Beare
Payee r
Transfer ( Same Bank)
Account
Account
Clearing ( Other Bank)
Account
Account
Process of Cheque
Payment
Essentials for cheque payment
• Cheque must be in a proper form
• Cheque should not be crossed
• Cheque should be payable to bear or
order
• Cheque should not be mutilated
• No unauthorized material alterations
• Funds must be sufficient
• The cheque should not be post-dated
or stale
• Cheque should be presented during
banking hours
• No legal bar prohibition payment
Endorsement of
Cheques
• Blank Endorsement or General
Endorsement
• Full endorsement or Special Endorsement
• Restrictive Endorsement
• Conditional Endorsement or qualified
Endorsement
• Partial endorsement
Paying Banker
The banker on whom the cheque is drawn or the banker
who is required to pay the cheque drawn on him by a
customer is called the Paying Banker or Drawee Banker.
• Cheque must be UV checked by the paying
banker for security
• He should see that the cheque is drawn in
Precautions to be proper form and satisfies all the
taken by a paying requirements of a valid cheque.
banker • He Should verify whether the cheque is
dated or not.
• He should satisfy himself that the amount
payable is certain.
To be continued…
• He should see whether there is sufficient amount in the
bank account.
• The banker should see whether the cheque is signed by the
Precautions to drawer.
• When a cheque is presented to him at the counter, the
be taken by a paying banker must verify whether it is an open (i.e.,
Uncrossed Cheque or Crossed Cheque).
paying banker • The Banker should see whether there is any material
alteration in the cheque.
• When a cheque presented for payment is mutilated, he
should check whether it is intentional or accidental.
Cancellation of Cheque
Date
Signature verified or not
Amount in figure & words
Payee’s Signature
Payment Break-up
All required (04) seals are affixed
MICR Cheque
FEATURES OF MICR CHEQUE
Aqua Security Ink is Invisible complex Pantograph- Tharomocromiccolor
MICR Line Code is
used to print pattern which is only Embedded is used which changes
written with
watermark of a visible in Ultra Violet Pantograph is added color of alphabet if it
Magnetic Ink.
Cheque Ray to avoid Photocopy get heat
Simplified Due Diligence
If payee is not the account holder, The Simplified due diligence
is maintained
• [Link] Withdrawal amount is below BDT 50,000.00- Obtain
Name & Contact Number in back of the cheque
• B. If from BDT 50,000.00- 5,00,000.00- Obtain Attested
Copy of Photo ID & follow point A
• [Link] than BDT 5,00,000.00- Comply Short KYC
REASONS FOR REFUSING
PAYMENT
• A Post Dated Cheque/ Stale Cheque
• On customer countermanding payment
• On receipt of a notice of Customer’s death
• Stop Payment made against Cheque
• On customer becoming insolvent
• On receipt of notice of customer’s insanity
• On receipt of Garnishee Order loss but also loss of credit or injury to the reputation
• On notice of assignment
• Trust account’s balance for personal use
• Stolen cheques
