Truncated cheques

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jagadish (Querist)
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02 November 2011 what is the meaning of truncated cheques and cheques in electonic form???

...

and also explain the sentence-
"a cheque is a bil of exchange drawnon a specified banker and payable on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form.....

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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03 November 2011 Truncated Cheque:
To process payments faster and more efficiently, many banks no longer transport paper checks, but replace them with digital images -- called substitute checks -- that can be transferred electronically, in a system called check truncation.

Suppose you are having a bank account with SBI, Jaipur Branch.
You issue me a cheque for Rs 50000/-
Means you have drawn the cheque on SBI, Jaipur Branch which will pay me on demand, means amount will be paid to me if I present the cheque to the Bank through my banker. If I keep it with me , I will not receive the amount.
Now , when I shall deposit the cheque to my Bank , It will make its electronic image and send this truncated form to the clearing house. Original cheque will not be sent.

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jagadish

jagadish (Querist)
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03 November 2011 ok thank you sir

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