PictureCredit: ERAI

What is a CHEQUE?

A cheque is an order to a bank to pay a stated sum from the drawer’s account, written on a specially printed form.

Usually people use these cheques to draw amount from the banks, which they save in various accounts with the bank. And, it can also be used to pay back the mortgage if people avail for it. Now a days, people commit fraudulent activities with this instrument of the bank. As per latest figure revealed by RBI the fraud cases are in rise from last one year and banks fraud cases almost doubled. These cases include wide range of fake activities like bogus loans and credit card.

The state of West Bengal and Maharashtra are the top two states affected deeply with these fraud cases. While such fraud cases are in rise the RBI is able to close only 30% of the cases every year.

There are wide range and different types of banks operating in our country. Among them the public sector banks are the widely affected with such fraud cases. Already, a whopping Rs.2,310 crore has been lost by the Punjab National Bank which leads the pack when it comes to frauds above ₹.1 lakh. Central Bank of India and State Bank of India follow close. Private banks in India account for 40 per cent of all fraudulent cases. Data reveals that public sector banks are better at handling fraud than banks in the private sector.  The fraudsters use various techniques to fraud which stumps the bank officials. Banks have now started adopting various precautions to identify spurious cheques and to avoid fraud.

Reserve Bank of India has given several guidelines for banks to prevent such fraudulent activities and to minimise the fraud up to some extent.

Picture Credit: Nation.com
Picture Credit: Nation.com
  • One measure aims to employ mobile technology in the form of sms where, the customer gets a message on his mobile about the transactions he or she does with the bank.
  • Another step is to inform the customer about the heavy clearing cheque if it is presented for clearance. They inform by phone calls and obtain confirmation from the payer who issued the cheque then they process the request. RBI has stated extra caution while clearing cheques that are above a certain threshold value.
  •  In more peculiar cases, the fraudsters were successful at furnishing and en-cashing cheques while the original cheques were still with the account holder. This was done by obtaining details of the customers through fraudulent methods. Such incidents calls for precautions to ensure no leakage of personal information happens either at bank level or through various media like chats and emails phishing sites or third party level like courier or printer which, the customers enter by getting fooled by the fraudsters.

Online payments Vs cheques:

While banks are growing vigorously vigilant about cheque security, there are some steps which customers have to take to prevent frauds. The best way for customers to reduce the risk is to transact through online banking for payments or availing various banking products. Banks try to attract and prefer customers through online banking. Hence, they give the customers various offers and discounts. As a viable alternative this allows easier, quicker and more secure modes of transaction. This includes credit card bill payment, opening accounts in any bank and making money transfer from your account to your loved ones fast and reliable. These transactions can be tracked by customers and bank with provided transaction ids and codes.


Things you need to take care of to avoid getting into fraud:

  • Don’t leave blank spaces in front of the amount line and the Payee name.
  • Use ball point pen as they are not easily washable
  • Reconcile your bank statements every fifteen days
  • Never share your bank details or security pin codes on phone or to the sales calls you get.
  • Never leave your cheque book in open or in your vehicle.
  • If you have faced a burglary, please ensure all the leaves of cheque books are present.
  • Unless needed destroy all ATM slips and cancelled cheques
  • Don’t make cheque payable in cash, as, it can be en-cashed by anyone.