Cheques

This is a presentation made on cheques ,It consists of all the information about : what are cheques,its legal definition, its history, the generalized features, the cheque types depending on the situation we use then and all the security features of cheques and the related case study.

1. CHEQUES Section 5 of the Indian negotiable instrument act of 1881 defines the cheque as “a bill of the exchange drawn specially on a specified banker and not on expressed to the payable otherwise than on demand

2. MEANING AND DEFINITION Thus a cheque is also a bill of exchange with three additional qualification. (a) it is always drawn on a specified banker. (b)it is always payable on demand. (c)it includes the electronic image of a truncated cheque and also a cheque in electronic form. in other words “cheque is an instrument in writing containing an unconditional order addressed to a banker ,sign by the person who has deposited money with the banker, requiring him to pay on demand a certain sum of money only to or the order of certain person or to the bearer of instrument.

3. ESSENTIAL FEATURES OF A CHEQUES ARE 1.a cheque must be in writing .the writing may be by means of a pen, a type writer , printed characters, ball pen or even pencil because law not specified the writing materials with which a cheque has to be written. 2. cheques must be in the foam of order and not in a foam of request. 3.the order must be unconditional. If any condition is attached with the order, the cheque will lose it’s legality. 4.the amount demanded must be for certain amount in money and not in kind . 5.the payment must be made to a certain person berer or self

4. 6. it must be drawn on a banker. 7.it must be signed by the account holder.

5. 4 types of cheques OPEN CHEQUES: A cheque is called opened cheque when it is open when it is possible to get cash over the counter at the bank. The holder of on open cheque can receive payment over the counter of the bank, deposit cheque in his own account or pass it to someone else by signing on the bank of a cheque. BEARER CHEQUES: A cheque which is payable to any persons who presents it for the payment at the bank counter is called bearer cheque. ORDER CHEQUES: It is the one which is payable t o a particular person. In such a cheque , the word “bearer” maybe cut out or cancelled and the word “order” maybe written.

6. 4 CROSS CHEQUE: When a cheque is crossed, the holder cannot encash it at the counter of the bank. The payment of such a cheque is only credited to the bank account of the payee. Based on location, cheques are: Local cheques Out station cheques At par cheques

7. BASED ON ITS VALUE, CHEUES ARE: NORMAL VALUE CHEQUES HIGH VALUE CHEQUES GIFT CHEQUES BANKS ALSO OFFER CHEQUES WHICH GURANTEE PAYMENTS: SELF CHEQUES POST DATED CHEQUES BANKER’S CHEQUE TRAVELLER’S CHEQUE

8. Advantages of the cheques

9. It is more convenient than carrying cash around. Payments can be stopped if necessary. Cheques are safer if crossed. One does not have to count notes and risk making counting mistakes. A cheque can be drawn up anytime. Somme are negotiable and can be endorsed in favour of a third party .

10. They can be post-dated . They can be traced if lost . Can be posted more cheaply . A customer is send a statement at the end of each month .

11. SECURITY FEATURES OF CHEQUES

12. Cts process

13. 1. Features of CTS-2010 Standard Cheque (new) 1. Branch address with IFSC code printed 2. Date of issue in dd /mm/ yyyy format within boxes. 3. Printers name with CTS-2010 in left side of cheque. 4. pantograph 5. New rupee symbol instead of bilingual format. 6. Please sign above" is mentioned on bottom right of the cheque

14. (old) cheque - Format 7. Watermark "CTS INDIA 8. Ultra Violet logo of Bank.

15. Tips For Detecting Counterfeit Cheques : COLOR - By fanning through a group of returned checks, a counterfeit may stand out as having a slightly different colour than the rest of the checks in the batch. PERFORATION - Most checks produced by a legitimate printer are perforated and have at least one rough edge. However, many companies are now using in-house laser printers with MICR capabilities to generate their own checks from blank stock. These checks may have a micro-perforated edge that is difficult to detect. MICR LINE INK - MICR stands for Magnetic Ink Character Recognition. It is a technology which allows machines to read and process cheques enabling thousands of cheque transactions in a short time. MICR code is usually a nine digit code comprising of some important information about the transaction and the bank . the first three digits representing the city code the next three digits representing the bank code the last three digits representing the bank branch code

16. Shorter clearing cycle Superior verification and reconciliation process No geographical restrictions as to jurisdiction Operational efficiency for banks and customers Reduction in operational risk and risks associated with paper clearing No collection charges for collection of cheque drawn on a bank Benefits of CTS

17. Case Study

18. Cheque Forgery The term " forged cheque " is often used to describe a  cheque  on which the drawer's signature is  forged  or unauthorized. It is the unlawful use of cheques in order to illegally acquire or borrow funds that do not exist within the account balance or account-holder's legal ownership . Sometimes the cheque fraud comes from an employee of the bank itself, as was the case with Suzette A. Brock, who was convicted of theft for writing five corporate cheques to her own birth name from her desk as a loan servicing agent for Banner Bank of Walla Walla, WA . Brock, whose birth name is Angenette Ruth Jonker, was charged with writing five corporate checks between August and February for various amounts. Prosecutors charged she made out the checks to her birth name and later deposited them in an account at Bank of America. She was arrested on March 9, 2015 after police were called to Banner Bank’s Human Resource Corporate Office. As part of her sentence, Brock was ordered to pay $15,385.21 in restitution to the bank in addition to other fines and court fees.

19. THANK YOU By M.SAI KOUSHIK REDDY