Thursday, January 31, 2013

Identifying Fraud Cheques / Demand Drafts using MICR Code

In accordance with Cheque Truncation System 2010 (CTS 2010) all the cheques should be, as far as possible, preprinted with account number field and it is considered "MUST" for current account holders and corporate accounts.
Obtained from RBI website - "CTS 2010 - Standard" Cheque leaf
All the cheques have MICR Band, which is basically the band at the bottom of the cheque or one can say the "FOOTER" of the cheque, the MICR Code is a 9 digit number (second number from left OR just after the cheque number)

The name of the Bank and the Branch are located on the top of the cheque or in the "HEADER" section of the cheque that includes the Bank's Logo, Bank Name, Branch Name (and address too, generally) and even the IFSC Code in most cases.

So, one of the easiest ways of recognising if a cheque is a valid cheque, is to match the IFSC Code, Branch Name / Address and the MICR Code.

The IFSC Code and MICR Code are unique to a particular branch and no two different brances (of same or different banks) can have these two codes exactly same ever.

A quick google Search in this fashion " MICR" could reveal the Bank's that particular branch's MICR Code instantly.

So be wise and before falling prey to any false schemes or frauds make sure you do a bit of checks by yourself just to ensure your own safety.

Here's an example below of a fraud cheque:

In this cheque you can notice that there is a Company (Bank) Logo, the name of the bank and the branch name / address on the Header part of the blog.

And in the "Footer" part, there are 3 sets of digits, the first set "837736" represents the cheque number, the second set "000015000" represents the MICR Code.

Now if we do a quick Google Search, the MICR Code for T.Nagar Chennai Branch of Canara Bank is "600015017" this shows that the cheque is not a valid cheque.