You
must very often have used your cheque book to issue a cheque to someone, or
better still have received it from someone. Apart from reading the amount
(that’s the first thing we see :P) have you ever looked at other numbers
written on the cheque? Ok, so you see account number and date but there are a
few more numbers written (four sets of numbers to be precise) at the bottom of
a cheque (see the pic below). Ever gave a thought to those? If you didn’t, read
further to know what these numbers mean.
To
be honest with you, even I had no idea what these numbers stand for, apart from
the leftmost number which is the cheque number. Even googling about it didn’t
help (you can find some information about MICR though.) So during my last visit
to bank, I asked the branch manager about it, and he was kind enough to explain
it to me in detail.
1) Cheque Number
As
I mentioned earlier, the first set of numbers represent the cheque number. It
is a six digit number.
2) MICR Code
It
stands for Magnetic Ink Character Recognition. This number helps a bank to
recognize the bank and branch that issued the cheque. You might be thinking
that this can be done just by looking at the cheque, but banks have to process
hundreds of cheques daily. Going through each and every cheque is a cumbersome
process. Instead, the cheques are sorted through a cheque reading machine which
uses this number to identify the bank and branch a cheque belongs to. This
makes the process faster.
The
MICR number is a nine digit number, which consists of three parts-
a) City Code: The
first three digits represent the city code and are same as the first three
digit of the PIN code of that city. For e.g., a bank in Hyderabad will have
first three digits of MICR code as 500 (since PIN code for Hyderabad starts
with 500)
b) Bank Code: The next three digits represent the bank code. Every bank
has a unique code assigned to it. For e.g., ICICI bank’s code is 229, for HDFC
it is 240 and so on.
c) Branch Code: The last three digits represent the branch code.
Thus you can easily find which bank and branch a cheque
belongs to by looking at its MICR number, and vice versa.
3)
Bank account Number
The third set of six digit numbers represents your account
number (It consists of a few digits of your account number). But if you pick an
old cheque book, issued probably before CBS (Core Banking Solution) was
introduced, you won’t find this set of number present.
(Note: I am not completely sure of this. Branch Manager of
the bank I visited told me this, and when I checked my ICICI cheque book, it
tallied with my account number. If you see the sample cheque from Axis bank
shown above, it matches there as well. But when I checked my HDFC account
cheque book, I found this number and my account number to be different. If
someone belongs to a banking background, or has some information about this,
please tell others about it through your comments.)
4)
Transaction ID
The last two digits tells whether a cheque is a local cheque
our payable at par cheque. 29, 30 and 31 represents payable at par cheque,
while 09, 10 and 11 represents local cheque. Payable at par cheque is a cheque
that can be cashed at any branch of the issuing bank, while local cheque can be
cashed only at the issuing branch. So, if you deposit a cheque in your bank,
with code 10 written at the bottom of the cheque, it’ll take a few days for the
money to come in your account. However since most of the branches these days
are CBS (Core Banking Solution) enabled, so the cheques are generally payable
at par.
One
More Interesting Thing…
Before ending this post I want to point your attention to
another interesting thing. These numbers are written in a different font style
with a special ink that contains magnetic material so that it can be recognized
by Magnetic Character Ink Reader.
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