How to Write a Check
A negotiable instrument that encompasses an unconditional order to the bank for paying a certain sum mentioned on it by the drawer to the bearer is termed as a check. It is an instrument in writing, addressed to a banker, signed by the person who has deposited money with the bank. There is a statutory obligation on the part of a banker to make payment only if,
Under section 6 of the Negotiable Instruments Act 1881:
A "check" is a bill of exchange payable to bearer, or demand can be drawn on an individual account with a banker.
Before the evolution of Checks, bills of exchange were being used by the 17th century. Initially, the checks were called "Drawn notes," and these were handwritten. The pre-printed form of the check was first used in the bank of England. The first bank was "Commercial Bank of Scotland" that personalize its customer's check by printing the name of the account holder in 1881.
There are three parties of check:
There are several types of checks:
Once checks are deposited for collection, they are sent either in physical form to the clearinghouse or through CTS (Check Truncation System). In the case of CTS, its electronic image is used for collecting the payment is called a CTS check. The physical checks are marked - "Scanned for clearing" are kept at the branch for seven years and are called date wise vouchers, and afterward, the bank is not entertained any legal queries regarding the transactions.
A check is the most common approach to pay money to someone. Writing a check is a simple and essential skill that everyone should know. Writing a check seems to be such an easy task, but do you know that any single mistakes lead to significant consequences for you.
If you are not attentive while writing a check, it can be misused, and you may face monitory loss. In this tutorial, we will cover all the process which you should always know before writing a check.
Writing a Check:
Write the Date:
Open your preferred check book, and go to the top right corner of your check book. There will be a blank box above the "Date," "Month," and "Year."
You should remember before entering a date that a check is a legal document, and the date you have written here should always be the specific day that you sign at the bottom of the check.
Write the Name of the Payee:
Once you enter the date on the check, you to write the "Payee name," "Company name," Or "Self" next to the line that says "Pay." If it is an organization and you are not sure about its name, first, you need to ensure that information correctly before you enter the name of the particular organization on the check. You can also write "Cash" next to the pay option, but be attentive, because anyone can withdraw cash from your check.
Ensure the following things while writing the name of the payee:
If you write a check in favour of any organization, you need to write its name full name. Avoid the use of the acronym.
Enter the Amount in Digit Form:
After now, to the right corner of the rupees, you will find a box with rupees icon, you need to enter the exact amount in digit form. Make sure you are entering the amount in rupees only. If you write ten thousand rupees, write "10000/00" or "10000.00."
Don't put space after the amount you entered "10000 " must put decimal or hyphen after the last digit of your exact amount. If you put space after the last digit of your amount, one can add additional alphabet "000" after the amount "10000," so the amount becomes "10000000." So, you need to be careful.
Write the Amount in the Word form:
Enter the exact amount in the "word" form to right next to the Rupees. If you have written a check for "10000/00", write "Ten thousand rupees only."
Sign the Check:
Go to the bottom right corner of the check, where you will see the option "AUTHORISED SIGNATORIES." Where you need to sign at the space provided above the "AUTHORISED SIGNATORIES" option.
Enter the reason for paying the money:
This "For" part of the check is optional, and it can help the issuer of the check to write a note to yourself to remember for what reason he/she is spending money. You can enter "For Donation" if you are sending a donation check.
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