Why Do Banks Hold Checks?

A bank cheque is referred to as a "cheque", and a depositor issues a certificate to a bank requesting payment of a certain amount from a current account. Where a cheque deposit account is opened at a bank, the bank gives a blank cheque book to the depositor to issue a cheque within its deposit amount. The bank pays the designated person or the holder according to the amount endorsed on the coupon. In capitalist countries, checks can be transferred for circulation, which has the function of currency. If the payee's name is recorded on the cheque, the payment is made on the basis of a cheque, which is called a "hidden cheque" or a "come's cheque"; if two parallel lines are drawn on the face of the cheque to indicate that it can only be transferred in a bank but not cash, it is called a "draw" "Cheque", "equality cheque" or "guaranteed check", the bank guarantees payment, called "guaranteed check". In China, a check is a type of settlement voucher that is used to withdraw cash from a bank or transfer to the same city. It is divided into two types: cash check and transfer check. They are all registered and are not allowed to be transferred. The use of checks for currency settlement can reduce cash flow and save circulation costs. ^[1]

Bank check

A bank cheque is referred to as a "cheque", and a depositor issues a certificate to a bank requesting payment of a certain amount from a current account. Where a cheque deposit account is opened at a bank, the bank gives a blank cheque book to the depositor to issue a cheque within its deposit amount. The bank pays the designated person or the holder according to the amount endorsed on the coupon. In capitalist countries, checks can be transferred for circulation, which has the function of currency. If the payee's name is recorded on the cheque, the payment is made on the basis of a cheque, which is called a "hidden cheque" or a "come's cheque"; if two parallel lines are drawn on the face of the cheque to indicate that it can only be transferred in a bank but not cash, it is called a "draw" "Cheque", "equality cheque" or "guaranteed check", the bank guarantees payment, called "guaranteed check". In China, a check is a type of settlement voucher that is used to withdraw cash from a bank or transfer to the same city. It is divided into two types: cash check and transfer check. They are all registered and are not allowed to be transferred. The use of checks for currency settlement can reduce cash flow and save circulation costs. ^[1]

Bank cheques are issued by banks and promise to be in

Units and individuals

Bank checks can be used for

Bank cheques are divided into indefinite amounts

If a customer applies for a bank check, the bank check application form must be filled in with the bank's name.

Items to check

Cheques can be divided into payment methods

The national check image exchange system built by the central bank went live on June 25, 2007, announcing the official end of the history that checks can only be used within the same city. Ordinary people hold a check and can use it anywhere in the country. However, after the cheques became available nationwide, there were also some rules. Citizens who tried to use personal cheques needed more attention.

After cheques are used nationwide, citizens can also try the large-scale "signing" process seen in movies and TV shows. An expert from the Hangzhou Central Sub-branch of the People's Bank of China stated that to issue a check, the following conditions must be met:

Open a deposit account. Enterprises and institutions and individuals shall hold valid certification documents to open a deposit account in a bank that can use checks, and deposit sufficient funds to issue checks.

Reserve bank seal. The bank seal is reserved for the bank to check the payment of the cheque. The customer can also agree with the bank to use the payment password on the cheque as a condition for the bank to review and pay the cheque amount.

Have reliable credit. Cheques are payment instruments based on creditworthiness. Banks will review the creditworthiness of enterprises, institutions and individuals applying for cheque business and decide whether to sell cheques to them based on the results of the review.

Whether it is a national banking institution or a local banking financial institution, as long as it is allowed to handle check settlement business, it can join the national check image exchange system, and its checks can be used nationwide.

Receiving check limit code to check

The biggest risk of using a check is to receive a "short check". An expert from the Hangzhou Branch of the People's Bank of China said that when receiving a check from another place, pay attention to the following: When receiving a check from another place, the payee should check whether the face value of the check exceeds the upper limit (500,000 yuan) and check the face of the check Is there a 12-digit bank code in the lower right? In addition to this, the compliance and completeness of the ticket elements should be reviewed. If the amount of the check exceeds the prescribed limit, or if the bank institution code is not filled in or filled out incompletely, the check should be returned to the payer and agreed with other payment methods.

After cheques are used nationwide, the arrival time of cheque payments at different locations has changed. Under normal circumstances, the check-in time for the same city check is within one business day after the payment bank is submitted, and the check in different places varies depending on the response level of the payment bank. The earliest payment can be received within 2 to 3 hours. Cheques are received within 3 working days from the date the bank accepts the cheque and no handling fee is charged. For customers who often receive checks, the correct calculation of the prompt payment period is an important review when receiving checks. The reminder payment period for cheques is 10 days from the date of issue, and the due date will be postponed on statutory holidays.

After the drawer issues a check, if the balance in his account at the time of payment is insufficient to pay the amount of the issued check, then the check is a "short check". Issuing a "blank check" will cause you a lot of trouble. For the issuance of a short check or a check that does not match the reserved seal, if the purpose is not to defraud property, the drawer will be fined 5% of the cheque's face value but not less than 1,000 yuan. The holder also has the right to request The drawer pays a compensation of 2% of the face value of the check; for the purpose of defrauding the property, the drawer will also be held criminally liable.

For the units or individuals who repeatedly issue short checks or checks that do not match their reserved seals, in addition to the above penalties, the central bank will also include them in the payment credit blacklist. This will reduce the units or individuals included in the blacklist management. Its credit rating will have a direct impact on the normal economic life of the drawer in the future; if the circumstances are serious, the banking financial institutions will also stop handling payment and settlement services for them.

Cheques are supported nationwide by imaging technology, which converts physical checks into cheque images, and uses image technology to solve the problem of delivery of physical notes across regions. After the national cheques are accepted, the payee can receive the cheques from other places. After the receiving bank receives the cheques submitted by the payee, the cheque image is transmitted to the paying bank through the image exchange system. The physical cheque is stopped at the receiving bank and no longer Return to the payment bank. After receiving the cheque image of the receiving bank, the paying bank shall perform verification based on the seal or payment password on the cheque, and pay after the verification is passed.