Filling Up of Bank Cheques
Bank Cheques is an important bank document that is used to make payments and exchange funds between people and two different accounts. A ChequeBook is issued by a bank to a valid account holder along with the welcome kit when a new account is opened.
Follow these steps to correctly fill up a cheque.
1. Fill in the date. This is called the date of issue. Mention the correct date in the top right column. It is the day, month and year in figures. A cheque once issued is valid for the next 3 months.
Note: Sometimes, a cheque may require a future date to be written on it. Such a cheque is called a Postdated cheque (PDC). This means that the Cheque cannot be cashed until that day. People tend to write a postdated cheque because when they do not want it to be encashed or deposited before a because when they do not want it to be encashed or deposited before a particular date. This is often used when one has to pay out a loan or a monthly installment which will be paid out at a future date.
2. Write the name of the person/company (Payee) you want to address the cheque to.
Note: Make sure you spell the name in the same way as it appears on the beneficiary’s account. If the name does not match, the cheque will not be valid for payment.
3. It is advisable to strike out (or bearer) at the end of the “payee” line.
Note: This will ensure that the cheque is encashed only to the person it is addressed to and not to just anyone who holds it.
4. Write the amount to be paid in words along the “Rupees” column. Strike a line after you fill in the amount in order to prevent any alteration.
5. Rewrite the exact same amount in figures within the adjacent box.
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Note: say to pay a sum of 1000 Rupees, write One Thousand only (in words); 1000/- (in figures) in the box.
6. Put your signature above your name to authorize the transaction. This should be the same or closest, the likeness of the signature specimen you have submitted to your bank while opening your account.
The name and account number of the holder is usually already printed on the cheque leaf. If it is not, carefully write your name in BLOCK letters and enter your Account Number in a designated box.
7. Mark out two parallel lines with “Account Payee only” written in the middle, on the top left corner of the cheque. This is called “Crossing Out a cheque”.
8. To cancel a cheque mark ‘CANCEL’ in bold across the face of the cheque and if possible, inform the bank officials or make a note of the cheque number and record it as canceled. You should also mutilate the MICR code of your canceled cheque or shred the whole cheque. You should additionally scratch out your signature on the cheque.
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Cheque Bounce Penalty/Charges?
If a Cheque bounce due to insufficient funds or any other technical reason, such as signature mismatch, overwriting and both the defaulter and the payee are charged by their respective banks.
The penalty charges for cheque outward return are close to Rs. 300+Gst for most banks, while charges for cheque inward return are about Rs. 100+Gst.
Cheque Bounce Charges different for different Bank, Public Sector Bank charges low as compare to Private Sector Bank.
The penalty charges vary from one bank to another and are different for different account types. Premium accounts usually have higher penalty charges.