How to get a Savings Bank Account - III - Cheque Books

Ensure you get it as per your choice

You may or may not be given the cheque book immediately upon opening your account. If the bank concerned has a centralised system for despatch of cheque books, it takes a few days. It may be sent to you at your address by courier. Note the following points with regard to the cheque book:

(a) It is usual for banks to issue a cheque book containing 10 leaves. If you require more leaves, please check with the bank officials and tell your requirements with reasons therefore e.g., the need to issue EMI cheques;

(b) Try to use ECS facility for regular payments instead of cheques. It is more convenient. I would describe the ECS mechanism with its attendant benefits later on;

(c) Depending on the value of your account, your bank may issue you a PAP cheque book. PAP stands for ‘payable at par’ at all branches of the bank across the country. For example, if you have a PAP cheque book issued by a branch of Bank X in Delhi, you can make payment to a party at Bangalore with such a cheque and that party can obtain the payment at any of the branches of X Bank at Bangalore. He can also deposit the same cheque in his account in Bangalore and that Bank can get it cleared for him at the local clearing. PAP cheque thus can be used in lieu of bank drafts or other forms of remittances to some extent;

(d) Some banks get your name printed on the cheque book issued to you. This gives you some measure of psychological satisfaction. It normally feels good to issue a cheque with your name printed on to it. Even the party who takes the cheque may somehow have a better perception about your creditworthiness;

A few basic things about the contents of the cheque leaves:

(i) MICR number – At the bottom of the cheque leaf runs a line containing four sets of numbers punctuated by delimiters e.g., 812321 400229055 647000 29

In the above line, the first six digits denote the serial number of the cheque. The next 9 digits signify the MICR no. Of these 9 digits the first 3 digits signify the place e.g., 400 refers to Mumbai. This is followed by three digits (here 229) signifying the code of the bank (229 refers to ICICI Bank) and the last three digit representing the code of the branch. The next six digits constitue the account number field and it is optional. In case of givernmnt cheques issued by RBI, this field is of seven digit length. The last two digits represent the transaction code e.g., savings bank. Government cheques drawn on RBI has code of three digits.

Please note that MICR stands for Magnetic Ink Character Recognition. This number is printed on the cheque leaves in special ink or toner that carry magnetic property making itself machine readable. Using this MICR band, it is possible to segregate hundreds of thousands of cheques according to banks, branches and account types in the quickest possible time and accurately so. This property of MICR is also used for electronic clearing system like ECS.

You are advised never to fold the cheques in a manner that could damage the digits printed in the MICR band, because this robs its machine readability. If you have done so by mistake, and the cheque requires to pass through bankers’ clearing system, it may not be accepted by banks for the purpose of collection.

(ii) IFSC number: IFSC stands for Indian Financial System Code. 

IFSC has been used earlier as the addressing code between banks for message transmission through structured financial messaging system. However, its benefit has now begun to touch large number of bank customers because of its use in money transfers using modern technology driven systems especially RTGS, and NEFT. Banks have been gradually allocating unique IFSC numbers to their branches in phases to reach the benefit to increasingly more customers. IFSC number is supposed to be just above the cheque serial number in the MICR band. It is a 11 character alphanumeric code as below:

  (a) first four characters represent the bank code;

  (b) 5^th character is zero (it is reserved for future use;

  (c) last six characters signify the branch code;

It is possible to transfer the funds accurately and expeditiously to the target branch using the IFSC number.

In April this year the RBI has advised banks to print the IFSC code in their customers’ passbook or bank statements.