Definition of Cheque :
A Cheque is a dated and signed document that orders a bank to pay a particular amount of money from a person’s account to the person in whose name the cheque has been issued. cheque is a type bill of exchange under the Negotiable Instruments Act 1881.
Why should we write cheque correctly :
A cheque is a widely used instrument to make payments for a long time, in India people prefer to write cheque instead of making online payments.
Businessman write so many cheques on daily basis to make payment to their vendor or customer .Cheque is a legal document under negotiable instrument act 1881, so people prefer cheques because it gives payees legal rights to get money back in case of defaults.
At the time of writing cheques, it looks very simple but there are many weak points where fraudsters alter the cheque and misuse of your hard-earned money. If you are not careful in writing cheque then it can be misused by someone else.
As per RBI , as many as 6,801 cases of fraud were reported by scheduled commercial banks and select financial institutions involving an amount of ₹71,542.93 crores in the last fiscal (increase of over 73 percent in the fraud amount), the Reserve Bank of India (RBI) said in reply to an RTI query filed by this PTI journalist in 2018-19.
So many frauds have been reported by banks due to manipulation in cheques, so you should take care before writing cheque to avoid this.
Steps to writing cheque Correct and Safe
1. Cheque should be crossed “ A/c Payee “
If you specify on cheque “account payee” then the same cheque will be cleared in particular person account only that cheque can not be paid over the cash counter of the bank.
If you want that the cheque you have given should be deposited in that person’s account only, then you should write the “ account payee only” on the cheque, then this cheque will be deposited in that person’s account only.
That person will not be able to take out the case at the bank’s cash counter
2. Add a line after the payee name and amount
If you look at the cheque carefully, there is a lot of space to write the payee name and the amount.
Once you write the payee name, there is still a lot of empty space left. You have to draw a line on this empty space so that The fraudster could not write anything in an empty space.
3. Cancel the word “Bearer”
In the above image at the end of a payee name, right-hand side Bearer” mention, which means that either the person whose name is written in the cheque or anyone else who is bearing the cheque can withdraw money.
So you must always cancel the word “Bearer” from the cheque. This ensures additional safety of the cheque.
4. Add a sign of “/-” after the amount”
If you are not using this sign at the end of the amount in figure “ /- “ then it is a possibility that someone can change the amount of cheque.
Suppose you issue a cheque of Rs. 8000/- to anyone and you write like 8000 then fraudster can alter cheque amount from 8000 to 80000, so correct way of writing the amount in the figure is Rs.8000/-
5. Do not leave spaces between two words or numbers
When you write a cheque, you should not leave much space between the two words, if you leave more space, then the fraudster changes the name on that empty space,
Due to this change, the cheque is paid to someone else and due to this change, you will incur a financial loss.
Wrong-way to writing: Ankit Sharma
The correct way to writing: Ankit Sharma
If you leave more space then in the above example fraudster can change payee name from Ankit Sharma to Ankita Sharma.
6. Keep the records of your cheques:
You should keep a record of the cheque issued by you so that if you ever need any information in the future, then you will know that to whom you issued a particular cheque and what was its amount
7. Immediate stop payment of cheque lost cheque
If you have given a cheque to a person and they have lost the cheque, you should immediately give stop payment instruction of particular cheque to a bank in writing, otherwise, someone else will use that cheque and you face financial loss.
You can also use digital plate form for stop payment like net banking, ATM, phone banking, etc.
8. Use cello tape on Payee name and account
You can also use Cello tape to secure Payee name, this will not allow anyone to change the name and amount and your cheque will be safe.
If you use cello tape, no one will be able to make any changes in the future and your cheque will be safe.
Please refer below images
9. Don’t do extra signature on a cheque
If it is not necessary, avoid the extra signature because if you do additional sign and if someone changes the payee name or amount, then you cannot win the legal case because your signature is there, which proves that you knew about it.
The extra sign gives the fraudster a chance to change the payee name and the amount, and later you cannot even refuse because you have a signature.
10. Mention not over Rs……/- on cheque
When you write the maximum limit on the cheque, no one will be able to withdraw more money from that maximum limit.
For example, if you have written the maximum limit of Rs.10,000 / – then no one will be able to withdraw more than Rs.10,000 / -.
This will protect you from any kind of fraud.
As you have read above, what are the things that we should take care of before writing the cheque so that the fraudsters cannot misuse your cheque, you should take care before writing the cheque so that there is no possibility of frauds and to avoid legal trouble.
Your financial safety is your caution to write a cheque
Thanks for reading…