“Cheque” or “Check” is a negotiable instrument which can be further elaborated in general as a document which is produced in a bank in order to demand a payment from the account of Account Holder. A cheque payable either to payee or to a bearer and Section 6 of Negotiable Instruments Act, 1881 , exclusively defines a cheque as a bill of exchange drawn on a specified banker, and not expressed to be payable otherwise than on demand.
The demand of money is obviously from the previously deposited money in that account. A cheque to be passed from the bank must contain an unconditional order from drawer which directs bank to pay the amount. Moreover, the amount demanded on the Cheque must be present in the account of the signatory authority.
The origin of Cheque is from bank due to demand for easy transactions and to avoid risk of carrying large amount of money. Secondly, the reputed and great institutions are engaged in so many areas and need transaction of money on every level, so in order to simplify the transaction it has to be enforced. All the guidelines in respect of money transactions i.e., by cheque or cash in proper documented custody are maintained by the RBI which acts as governing body. Depending upon various needs in bank channel RBI has implemented various changes from time to time. However, the commercial bank itself is also putting forward many security features in a way to authenticate their Cheques.
From the time of ancient Persian kingdom, the use of cheque is evident in the world and in India it prevailed from the Mauryan era, where they used to issue an order or “adesh” to the banker to pay a third person. It was similar to the principles of bill of exchange as we are familiar in the modern days.
In the roman period the bankers were ordered by their customers to pay only to some of the privileged payees who are accompanied by some promissory note issued by the customer or in exchange of some goods, preferably gold. Cheque system was also popular among the Arabic traders and was known as “saqa”. The popularity was due to the same principle as today i.e., to avoid risk of carrying large amount of cash money. At that time traders used to travel long distances from one part of country to other part for business and trading purposes and to protect their wealth from dacoity, use of cheque or “saqa” was in vogue amongst them.
In the 17th century the bill of exchange was remodelled and a prototype of cheque was evolved and termed as “drawn notes” which were hand written. However, in the year 1717, Bank of England issued a printed form of cheque which was initially meant for corporate sectors but soon after they were used on personal level banking.
In the year 1770 cheque was introduced in India by Bank of Hindustan soon after its establishment at Kolkata (that time Calcutta) by the European management.
Present Scenario In India, investigating agencies as well as many nationalised and private banks encounter number of fraudulent activities occurring during the clearance of cheques at the cash counters. The lack of security features and simple appearance of cheques makes any layman vulnerable to forgery. It can be used to thug a layman by the use of recent and available modern techniques such as advanced scanning- printing instruments. Reportedly, many cases of cheque forgery are related to the phenomenon of interpolation while in other similar cases it is observed that the forger scans the whole cheque leaf and imitate it by using advanced printers which can produce almost exact replica of the original cheque. The cheques before the implementation of CTS did not contained sufficient security features to be identified clearly and hence, they were used accordingly for the malafide purpose. However, in the year 2013 Reserve Bank of India (RBI) decided to implement the more awaited Cheque Truncation Scheme (CTS). According to this scheme, along with other procedural banking processes, a bank consumer will be unable to use their old security featureless cheques and mandatorily have to switch over new cheque book containing more fool proof security features.
Security features are the features which are added in a piece of paper to differentiate it from the other paper and make the piece of paper authenticated like currencies, bank notes, passports, stamp papers, Voter ID, cheques etc. These features plays vital role in preventing counterfeiting of various documents which carry economic value as well as prestige of country.
Following is the explanation of the security features of Indian bank cheques in reference with old cheques and those modern cheques which were issued after the implementation of Cheque Truncation System (CTS) and both were compared in terms of their available security features.
Security Features on a cheque
The study of various nationalised and private bank’s cheques reveals the following security Features:
- Cheque design
- Colour system
- Uniform dimensions .
- Uniform paper quality .
- Ultra Violet light features
- Pantographic image
- Microscopic features.
Every bank, whether government or private, issues its cheques equipped with such branding signatures from which a common man can identify easily to which bank the particular cheque belongs. The main role in verification of the identity of bank cheque is played simply by Bank name, Branch address & code, Bank logo and sometimes holograms. These features are restricted only upto that person who is familiar with the cheque previously and a person who is not familiar with the same can be fooled easily.
In discussion with some bank officials, the authors came to know an interesting fact about the colour system of a cheque that when a genuine cheque is treated with normal water, the colour dissolves and gives a bleeding effect. To find the sanguinity of the said fact, some cheques were experimented by applying water on them and the results were affirmative. The inks used in printing cheques are water soluble which dissolves in water. When the exposed portion of cheque was observed under the UV light it showed blue fluorescence which was however of low intensity. This is a common feature of both, old as well as modern cheques. It is known that some inkjet printers among other regular printers use water soluble inks (aqueous inks) which may give similar illusion on dissolving. Hence, use of such experiment cannot justify the genuineness of a cheque. However, it is suggested that solvent inks may be preferred for printing cheques to ensure no dissolution of ink.
As per RBI guidelines, cheque has a certain size which is fixed for almost all bank cheques. The length of a standard cheque is 8.0 ± 0.2 inches (≈ 202 mm) and the width is 3.66 ± 0.2 inches (≈ 92 mm). The diagonal length is 8.8 ± 0.2 inches (≈ 220 mm). The length of the white strip for MICR on the bottom of the cheque is 8.0 ± 0.2 inches (≈ 202 mm) and the width is 0.5 ± 0.2 inches (≈ 13 mm). The length of the Amount box is 1.55 inches (≈ 39 mm) while the width is 0.34 inches (≈ 8.5 mm).
Uniform paper quality
The paper used for the manufacture of cheques are carbon less and UV dull (discussed later), i.e., it do not glow under the UV light source. The paper used for the manufacture of cheque is known as MICR cheque paper. It is generally a 95 GSM (gram per square metre) bond paper which is manufactured in such a manner that they can be protected against any alterations done in a cheque by using chemical erasures like acids, alkalis, bleaches or any organic – inorganic solvents. It is suggested that 100 GSM paper may be used to make a cheque more unique.
Old cheque contained no watermarks and if some of them which were present, they were generally logos of paper manufacturers only. In the modern cheques watermarks are prominently available and they are visible under the transmitted light source. These watermarks are developed in the early stage of paper manufacture by using dandy rolls. These watermarks depict bank’s name or logo. These watermarks are visible in their linear manner of writing system, i.e., left to right, from either side of the cheque under the transmitted light source. The following images reveal this merit.
During the examination of watermarks, the authors observed a strange property, that most of the bank cheques contained watermarks of their respective bank’s name visible straight, in their linear formation, from the reverse side of the cheques. Following images depicts the same.
Ultra Violet light features
Modern cheques are equipped with UV features and every bank has its own unique pattern, which is visible under the UV light source due to fluorescence. These features are embedded at the printing stage. These patterns can be bank’s logo, bank’s name, Rupee column and sometimes the micro lettering at the background of the cheque. Just like currencies, cheques can easily be verified under the UV light for checking its authenticity as many of its security features glow under the UV light source.
Every cheque has a unique rectangular image on the left side below the box of account number which is known as Pantographic Image. This image consist of criss cross lines in a unique pattern which is based on the principles of steganography.
This is actually an anti-copying feature. If a cheque is copied by any photocopier machine it will result a production of a copy showing “VOID” or “COPY” inside the pantographic image making the value of that copied cheque null and void and forgery is detected immediately by any cashier or banker.
The pantographic image security feature has its own limitations as it is quite unresponsive towards Laser- Jet black & white photocopy, coloured photocopy, scanning- printing methods and many other advanced photocopier machines. Thus the purpose of giving such security feature by RBI gets defeated. It almost allows the pantographic image to pass as it is in Laser- Jet black & white photocopy machine and colour photocopier machine (Laser- jet or Ink- Jet) with some degree of deteriorated lines.
However, if a cheque leaf is first scanned and then allowed to be printed using an advanced printing device, the image is generated same as the original one with untraceable amount of defects.
Hence, this feature needs a strict revision to rectify this limitation i.e., non- appearance of “VOID” or “COPY” in the pantographic image.
After the implementation of CTS, the cheques are now having micro-printing on them. It is very important to mention that in a cheque, the underlines of the pay column, date columns, Rupee column or amount box are not mere simple lines but they are a series of micro printing, which is name of the bank. The micro printing is visible only under magnification.
Micro- printings are also available on the background image of the cheque. It is sometimes become visible to naked eyes or with a simple magnifying glass it is properly readable.
Discussion and Suggestions
A long detailed examination reveals that the modern cheques are well enough equipped with various security features but some of them are still needed more heed to become fool proof. For the safe guard of cheques following additional security features may be incorporated by the bank or the regulatory authority:
- Bar code or 2D- Quick Response (QR) codeIt is the simplest way to make a cheque protective against forgery. Each cheque leaf should be given its personal code. In the introductory page as well as in the counterfoil pages of the chequebook, total number of codes along with its respective cheque numbers and serial numbers should be provided which can be tallied and verified in case of doubt. Every code shall contain following informations:
- Account Holder’s Name
- Account Number
- Bank’s Name
- Branch Code
- Respective Cheque Number
- MICR Code
- HologramsHolograms are 3-Dimensional stickers which can be incorporated in a cheque leaf at its manufacturing stage through which a layman can find out the genuineness of the cheque. It is the easy to introduce and is also economical in nature as well. It is suggested that holograms may contain the identity of the respective Bank, i.e., like bank name or bank logo or genuine stamp, etc.
- Security threadIf possible, same like as currencies, security thread may be introduced to every cheque leaf which should contain the bank’s name or anything desired by the respective bank. However, due its expensive nature it is not recommended in the personal level banking cheques but it may be incorporated in those cheques which are used in very large transactions, such as in the current accounts.
- Security FibresSecurity fibres may be incorporated in order make the cheque more protective against forgery. It glows under the UV light source. Nowadays, muti- tone fibres are available in various other security documents like currency notes, stamp papers, etc.
- Separate Box systemAs per the RBI guidelines and directives to the banks, no banks can receive a cheque having alterations or corrections more than tolerable limit. However, in order not to tread on the consumers, some banks do accept the same and a forger easily takes advantage of it. Using the phenomenon of interpolation, forger deceives someone and these types of cases are frequent in the cheque related frauds. For example,
To avoid the above mentioned situation and to make a balance between business and consumer satisfaction, bank should come out with a solution of equilibrium. For this reason, it is suggested that separate boxes for every digit of the amount figure and the bearer column should be given. In the amount column, to avoid interpolation, no space should be left. The boxes of the amount column should be filled in such a manner that the “ones” starts from the extreme left and the remaining empty boxes must be striked- out or crossed- out to avoid the above mentioned method of forgery,
For example- Place of possible interpolation Interpolation by putting one “0” Place of possible interpolation Interpolation by putting “y”
- Other featuresThe background of boxes where the amount is indicated should be manufactured in such a manner that it could detect any alterations done to it. The name column, amount column and signature place should also be made like the same. The background fibres may be used in such a way that the ink must penetrate the paper fibres (Colour bleeding). This is to save the cheque from any alteration by chemical attacks. If they are subjected to chemical anyways, to make the signature or any letter disappear, the area must show a ghost image of the signature obliterated.
Sample cheque after suggested revision: