Instruction to Maintain Payments of Cheques in Banking System

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Instruction to maintain Payments of cheques in banking system


 S jTubrazy

The following procedure will be observed in passing cheques for payments on current and cash credit accounts:-

(a)    The cheque will be scrutinized by the ledger who muststsifyhimself that is in order in every particulars that it is from the drawer’s current cheque book and that the amount does not exceed the credit balance of the account.

(b)   He will then post the amount in the ledger enter the folio number in the top left corner of the cheque and brand the cheque with the pay cash or ‘transfer’ , stamp , as the case my be and initial the cheque against the word ‘Entd’ to signify that it is order and has been duly posted. At branches where the token system is in force he will hand the presenter of a cash cheque a token the number of which he will enter at the centre of the top of the cheque and initial there against.

(c)     The cheque will be sent to an authorized passing official who after satisfying himself that it is in order in every particular will pass it for payment. If the cheque is for payment in cash he will at the same time enter the amount in his cash scroll and number the cheque with his cash scroll sequence number if for transfer he will cancel drawer’s signature.

(d)   At branches where the local principle officer permit cheque not exceeding Rs. 500/- each may in anticipation of the above procedure be  en-cashed for constituents personally or for undoubtedly respectable payees known to the bank under the authority of head cashier who will satisfy himself that the cheques are in their order and that the drawers have the necessary funds in their accounts. Such cheques will be branded with cash paid date stamp and sent to the ledger keepers who will initial for them in a pass book specially kept by head cashier for the purpose. The cheques will then be posted in the ledgers an formally passed for payment in the manner described above.

The passing official will always refer to the ledger before passing cheque for an amount over Rs. 500 for cash payment or Rs. 1000 for transfer and in all cases where eh is doubtful  of the constituents’ position and will evidence his reference by initialing on the left of the relative debit entry. If necessary he must ascertain whether any credits have been received in the office which have not been posted and he should examine all credits of the same day whether posted or not, when satisfying himself that he is not permitting an unauthorized overdraft in the account.

Care must be taken that debits to an account are not allowed against uncleared cheques without the authority of the manager. The credit slips for cheques on local banks should be retained by a responsible officials until the proceeds are received. At branches where clearing arrangements exits a clearing adjustment account may be opened in current account. To this will be debited are amounts of instruments if any obtained from local banks in lieu of cheques etc returned unpaid after normal cleaning hours pending realization the following working day. Where such an account is maintained alldebitesthereon must be passed by the manager.

All cheques presented for payment which if paid would be created an unauthorized overdraft or a debit balance in excess of the authorized drawing power must be entered in the cheques referred and returned register full particulars of the cheques the balance of the account against which they are drawn and the amount of the authorized drawing power and uncleared being given. The cheques will then be sent in the register to the manager who will write pay or return in the register under his initials. Passing officials must see by reference to the register that no such cheques is paid without the sanction of the manager. When cheques are returned for insufficient funds the relative memo must be initialed by the manager himself.


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