What is Cheque – It is a type bill of exchange as per Negotiable Instruments Act 1881. Cheque is drawn on a specified bank or A cheque is a document that orders a bank to pay a specific amount of money from a person’s account to the person in whose name the cheque has been issued. In simple language we can say that we may provide a cheque (A bill of exchange) to someone to get money from the Bank. Basically three people are included to draw a cheque as following:
1-Drawer-Drawer is person whom account will be debit after payment or the account holder who give the cheque.
2-Drawee-The bank who draw the cheque means the person has the account in that bank.
3-Payee– Payee is the person whose name is written on the cheque or who receive the money after the payment of cheque from bank.
Type of cheque(based on Date)
1-Anti Dated Cheque-A cheque which bear the prior date from the date of signing by the drawer. For example- A cheque has a date of 20 January 2015 and signed on 5 February 2015 or drawer account will be open 6 February 2015.
2-Post Dated Cheque –A cheque which bear the upcoming date from the actual date of signing the cheque. For example-a cheque has a date of 10 march 2015 and signed on 5 february 2015.
3- Stale Cheque– A cheque whose validity has been expired and is presented in bank after expire date.
- In case of post dated cheque, drawer stop the payment during the period of dates.
- Validity of cheque- 3 Months
- A stale cheque can be re validated any number of times.
Cheque Truncation System 2010 (CTS-2010)
Cheque truncation means the process of handling cheques physically stopped and the image of cheque is sent to a common platform for clearing.
There are many features in CTS-2010 standard related to cheques-
1-Paper must be chemical sensitive.It should react instantly if any chemical is applied on cheque for any alteration.
2-cheque will carry a water mark with the words “CTS INDIA”.
3-Void pantograph must be on cheque. When anyone make a photocopy of cheque then photocopy will carry word ‘VOID’ on the place of void pantograph.
4-There should be bank logo on cheque printed in UV ink.
5-There should be micro lettering on the cheque in the form of bank name.
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