What is Bank Cheque Book?
A bank cheque book is a collection of printed cheques issued by a bank to its account holder. In India, when you open a savings or current account, the bank provides you with a set of blank cheques bound together in a booklet. Each cheque is a written, dated, and signed instrument that directs the bank to pay a specific amount of money from your account to the person or organization named on the cheque.
Essentially, a cheque book serves as a tool for non-cash payments, allowing account holders to transfer funds without carrying physical currency. Cheque books have been an important part of the banking and finance industry in India for decades, offering a reliable way to make payments such as utility bills, rent, salaries, or even transfer money between accounts.
How Does Bank Cheque Book Work?
When you receive a cheque book from your bank, it contains a series of pre-numbered cheques. Each cheque has key details pre-printed, including:
- Your bank’s name and branch details
- Your account holder name
- Your account number and MICR (Magnetic Ink Character Recognition) code line
- A unique cheque number
To use a cheque, you follow these steps:
- Fill in the Date: Write the current date or the date on which you want the cheque to be cashed.
- Payee Details: Write the name of the person or entity you wish to pay. This must match their bank account or identity exactly to avoid disputes.
- Amount in Words and Figures: Write the amount first in words (e.g., “Rupees Five Thousand Only”) and then in numerals (e.g., “₹5,000.00”). The amount in words is considered legally binding if there is any discrepancy.
- Signature: Sign across the cheque as per the signature registered with the bank. Without a correct signature, the bank will not honour the cheque.
- Crossing or Stamping (if needed): If you want the cheque to be deposited only into a bank account and not cashed over the counter, you can cross it or use an “A/C Payee” stamp.
Once the cheque is drawn, the payee deposits it at their bank. The payee’s bank then sends it to the Clearing House (typically managed by the Reserve Bank of India or a clearing corporation). Through the clearing process, funds move from the payer’s bank account to the payee’s bank account. This usually takes one to three business days, depending on whether it is an intra-city clearing or an inter-city clearing.
Components of a Bank Cheque Book
A typical bank cheque book in India comprises the following components:
Cheque Leaves: Each leaf (individual cheque) consists of several printed sections:
- Branch Information: The name, address, and branch code.
- Account Holder Information: Your name and sometimes your customer ID.
- Cheque Number: A unique five or six-digit number printed on the top corner of each cheque for tracking.
- Date Line: A blank space to write the date in DD/MM/YYYY format.
- Payee Line: Space to write the name of the person or organization to be paid.
- Amount Lines: Two separate fields-one for the amount in words and another for the amount in numerals.
- Signature Line: Space at the bottom right where you sign.
- MICR Code: A nine-digit code at the bottom of the cheque, printed in magnetic ink, which helps banks process the cheque quickly.
Stub or Counterfoil: Each cheque leaf is attached to a stub where you can make notes about the cheque’s purpose (e.g., “Rent for June”). This helps you maintain a manual record of outgoing payments.
Front Cover and Binding: A sturdy cover (often cardboard) protects the cheques and allows easy flipping from one leaf to another. A central string or adhesive secure the leaves in sequence.
Instruction Page: In many cheque books, there is an introductory page explaining how to fill out cheques correctly, safety precautions (like never signing blank cheques), and what to do if a cheque is lost or stolen.
Types of Bank Cheque Book
In India, banks may offer different types of cheque books depending on the type of account and additional services requested. Common types include:
Regular Cheque Book:
- Issued with basic savings or current accounts.
- Usually comes with 25 or 50 leaves.
- Standard layout with essential security features (watermark, microprinting).
Customized Cheque Book:
- You can order cheques with personalized designs, such as a family photograph or a themed background.
- Often comes with a fee, depending on the bank’s policy.
- Security features remain intact despite customization.
E-Cheque Book (Cheque Book Request via Net Banking/Mobile App):
- Not a different physical type, but a process where you request a replacement cheque book through online banking.
- The bank mails the physical cheque leaves to your registered address.
Corporate or Bulk Cheque Book:
- Designed for businesses that require many cheques.
- Comes with extra security features like holograms or special watermarks.
- May include pads of undated cheques for payroll or vendor payments.
Overnight Cheque Book Issuance:
- Some banks offer expedited or same-day delivery services in metro cities.
- Suitable for customers who need cheque books urgently.
- Often accompanied by an extra charge for courier or issuance fees.
Feature of Bank Cheque Book
A cheque book in India typically includes several security and convenience features designed to protect both the account holder and the bank. Key features are:
- MICR Technology: The Magnetic Ink Character Recognition line at the bottom of every cheque, which speeds up clearing and reduces errors.
- Watermark: A faint printed design on the cheque paper that is visible when held against light. It makes counterfeiting more difficult.
- Invisible Fluorescent Ink: Some cheques have areas printed in fluorescent ink, visible only under UV light for added verification.
- Security Thread: A thin metallic thread woven into the paper, often visible when held to light, to prevent forgery.
- Microprinting: Very small text printed along the borders or signature line. It appears as a solid line to the naked eye but is readable under magnification, deterring photocopy fraud.
- Hologram or Foil Stamp: Present on some high-security or corporate cheque books, making duplication harder.
- Perforation for Easy Detachment: Ensures clean separation of each cheque leaf without damaging adjacent leaves.
- Carbonless Copy (Optional): A duplicate copy (usually pink) behind the original cheque leaf, which you can keep for your records. As you write on the original, the duplicate is automatically imprinted.
- Cheque Book Size Options: Banks often give you the choice between a 25-leaf or 50-leaf cheque book, depending on your anticipated usage.
- Account Information Printed: Pre-printed details like account number and account holder name help prevent manual errors when filling out cheques.
Benefits of Bank Cheque Book
Even in a digital era, cheque books continue to offer certain advantages for many users in India. Key benefits include:
Widely Accepted Payment Method:
Landlords, schools, and many vendors still prefer or require cheques, especially for large payments such as rent, tuition, or property transactions.
Paper Trail and Record Keeping:
Each cheque leaves a clear audit trail, with numbered leaves and bank records showing when and where a cheque was presented.
The counterfoil allows you to maintain a manual log of each payment.
Delayed Funds Transfer:
Writing a post-dated cheque enables you to schedule payments in advance. This is useful for recurring obligations like EMIs, utility bills, or rent.
Enhanced Security Compared to Cash:
If a cheque is lost or stolen, you can place a stop payment request with the bank. Whereas lost cash cannot be replaced, a cheque can be rendered invalid.
Convenience for Large Amounts:
Writing a cheque is simpler than carrying a large sum of cash, and there is less risk of theft.
Professional Image for Businesses:
Businesses issuing cheques often appear more credible and professional compared to paying in cash.
Interest Earnings Continue:
Funds remain in your bank account until the cheque is cleared, allowing you to earn any interest on your balance up to that point.
Which Parties Are Involved When You Use Your Bank Cheque Book?
Several parties play distinct roles in the lifecycle of a cheque transaction. Understanding who is involved helps clarify responsibilities and risk:
- Drawer (Account Holder): The person or business that writes (draws) the cheque. In India, this is the individual whose name appears on the cheque and whose bank holds the funds.
- Drawee Bank (Issuer Bank): The bank where the drawer holds an account. This bank is responsible for honouring (paying) the cheque when it is presented, provided sufficient funds are available and no stop payment is in place.
- Payee: The individual or organization to whom the cheque is made payable. The payee presents the cheque to their bank for deposit or collection.
- Collecting Bank (Payee’s Bank): The bank where the payee holds an account and where they deposit the cheque. This bank sends the cheque through the clearing system to the drawee bank.
- Clearing House / Clearing Corporation: In India, cheques are processed through either micro-clearing or regional clearing houses, regulated by the Reserve Bank of India. Larger cities often have an Automated Clearing House (ACH). These entities facilitate the exchange of physical or electronic cheque images between collecting and drawee banks.
- Reserve Bank of India (RBI): While not directly involved in individual cheque clearances, the RBI oversees and regulates the entire clearing process. It sets rules and timings for clearing cycles.
- Cheques Truncation System (CTS) Operators: In major metro areas, CTS allows banks to electronically transmit cheque images rather than physically move paper cheques. This speeds up the process and reduces the risk of misplaced paper.
- End Beneficiary (If Indirect Payee): In cases where the payee further transfers funds (e.g., a business paying a supplier from the original funds received), the final recipient may be considered an indirect beneficiary.
Uses of Bank Cheque Book
While digital payments have grown rapidly, cheque books remain important for specific purposes in India:
- Rent and Security Deposits: Many property owners still prefer cheques for monthly rent and security payments, as they offer a clear paper trail and can be post-dated.
- Bill Payments: Utility bills (electricity, water, telephone) and insurance premiums often accept cheque payments, especially where online payment is not feasible.
- Large Purchases: Buying vehicles, furniture, or electronics often involves cheque payments from individuals who do not want to carry large amounts of cash.
- Vendor Payments: Small businesses, contractors, or freelance professionals may request cheque payments for supplies or services rendered.
- Salary Payments: While many companies have shifted to direct bank transfers, some smaller enterprises still issue salary cheques to employees on payday.
- Donations and Charity: Cheques are commonly used to donate to temples, schools, NGOs, or charitable organizations, as they provide a record for tax benefits.
- Government Payments: Payment of certain government fees, such as land registration or court fees, may still accept cheques in many regions.
- Loan Repayments: When repaying personal or business loans, borrowers sometimes issue post-dated cheques to banks, which the bank encashes on specified dates.
- Security Deposits for Rentals or Equipment: When renting equipment or vehicles, a refundable security deposit via cheque is common practice, ensuring the lessor can claim funds in case of damage or non-return.
How to Request for a Bank Cheque Book?
In India, obtaining or replacing a cheque book is a straightforward process. The exact steps depend on your bank, but the general procedure is as follows:
Via Internet Banking
- Log In: Access your bank’s net banking portal.
- Navigate to Cheque Book Request: Under the “Requests” or “Services” section, look for “Cheque Book Request” or “Cheque Book / Demand Draft.”
- Select Account: Choose the savings or current account for which you want the cheque book.
- Choose Cheque Book Type: Select the number of leaves (e.g., 25 or 50) and any customization options if available.
- Confirm Delivery Address: Verify that your registered mailing address is correct. Some banks allow you to choose a different address for courier.
- Submit Request: Once confirmed, the bank processes the request, and you receive an acknowledgment. The cheque book is typically delivered within 7–10 working days, depending on your location.
Via Mobile Banking App
- Open App: Log in to your bank’s official mobile app.
- Go to Services/Requests: Tap on “Cheque Book” under “Account Services” or a similar menu.
- Follow Prompts: Select account, number of leaves, and delivery preferences.
- Submit and Track: You may receive an SMS or in-app notification when the cheque book is dispatched and when it is out for delivery.
By Visiting the Branch
- Obtain Application Form: At the branch, ask for a “Cheque Book Request Form” from the customer service desk.
- Fill in Details: Provide your account number, name, number of cheque leaves required, and sign the form.
- Submit ID Proof (If Required): Some banks may ask to verify your signature or identity, although most verify it against existing KYC records.
- Collect Acknowledgment Slip: The bank gives you a token or slip confirming your request.
- Wait for Delivery: The cheque book is usually sent via courier to your registered address within 7–10 working days.
By Phone Banking
- Dial the Customer Care Number: Use the toll-free number provided by your bank.
- Authenticate Yourself: Provide details like customer ID, account number, and answer security questions.
- Request Cheque Book: Ask the customer care representative to place a cheque book request for your account.
- Receive Confirmation: You might get an SMS or email confirming the request. The cheque book reaches your address as per bank timelines.
Charges and Fees
- Free Issuance: Many banks offer the first cheque book for free when you open an account.
- Subsequent Issuance Charges: You may be charged a nominal fee (for example, ₹50-₹100) per cheque book, depending on the number of leaves and bank policy.
- Urgent Delivery Charges: If you want expedited issuance, certain banks may levy an additional courier or service fee.
Tracking Your Request
- Net/Mobile Banking: Under “Request Status” or “Service Requests,” you can view the status (e.g., “Processed,” “Dispatched”).
- SMS Alerts: Most banks send periodic SMS updates from acknowledging the request to confirming dispatch and delivery.
- Customer Care: You can call the bank’s helpline to inquire about the expected delivery date if there is any delay beyond the standard timeframe.