Precautions to be taken by customers while dealing with cheques

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There are certain precautions to be taken by customers when dealing with cheques.

Ensure that the cheque has CTS 2010 written on it.
Preferably use image-friendly coloured inks like blue and black while writing cheques. Avoid using inks like green and red.
You should also avoid any alterations/corrections once you have written the cheque. Preferably, use a new cheque leaf if you need to make any alterations/corrections as the cheque may be cleared through image based clearing system.
Make sure that your signature on the cheque is the same as the signature in the bank records. Otherwise, your cheque may be declined and the bank may penalize you.

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Endorsing cheques

By endorsing the payee can use the same order cheque to pay to someone else by writing that person’s name behind the cheque and signing it.

Cheque Bouncing

A cheque is said to have been ‘bounced’ or ‘dishonoured‘ is when it is deposited or presented for payment but could not be encashed by the holder of the cheque.

Order Cheque

An order cheque is a cheque where only the person or party in whose name the cheque has been drawn, can withdraw the cash.

Cheque Truncation System

Cheque truncation is a form of cheque clearing system. It digitises a physical paper cheque into a substitute electronic form.

Crossed Cheque

Crossing a cheque means that it cannot be transferred to anyone else. These cheques can only be credited to the payee’s account.

Precautions to be taken by customers

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