How Does A Bank Verify A Check and 4 Elevating Factors for Verification

How Does A Bank Verify A Check

In this article we can understand how does a bank verify a check and 4 elevating factors for verification of check. Nowadays checks are very important in many transactions. If you are making transactions with checks then the transaction of check gets legal form.

But sometimes some people are fraudulent and deposit fake checks or forged checks in the bank. Some people unknowingly deposit these checks in the bank as such checks come into their hands. And they have no idea how to verify this check. Today in this article we are going to see how the bank verifies the check.

Usually, no one deposits a fake or bounced check in the bank. Both parties are charged by the bank for depositing such checks in the bank. Counterfeit checks are not cashed but the bank charges fees from both parties on such checks.

How Does A Bank Verify A Check

If you ever get a check from a stranger. If a check from someone you don’t know looks strange, slightly fake, or slightly different, you should check the check yourself first and then deposit it in the bank. Checks should be verified based on certain points to avoid such scams or forgery contained in the check. Now let us know how to do this verification in this article.

What is a check

 A check is a bill of exchange in which one party orders another to pay or transfer money. A check is a negotiable instrument covered by the Negotiable Instruments Act 1881.

A check is an essential document in a bank. In short, a check is a piece of paper. On which the bank’s name is printed and you use this check to pay someone to withdraw a large amount or to carry out many transactions. Since checks are available in the transactions, the transactions are executed very smoothly.

Method of depositing a check into the bank

How does a bank verify a check  – While depositing a check in the bank, the account holder has to submit the check to the bank along with the deposit slip. This deposit slip contains the name of the account holder, his account number, whose check it is, in which account it is to be deposited, date and signature, etc.

After attaching this slip to the check, the bank not only sees the slip but also verifies the check along with it. While verifying the check, which bank the check is from, whether the payee’s name is written correctly on the check, whether the amount is written correctly in letters and numbers, whether the check is signed by the proper person, whether the check is crossed, what is its date, etc. Along with the check number, MICR number, etc., checking the bank.

Types of checks

1. Bearer Check –

A bearer check is payable to the person who brings it to the bank. Such checks must be endorsed. Such a check is usually used to withdraw cash from an account.

2. Order Check –

An order check is drawn on a specific person. Only the person in whose name the check is issued receives the payment of the check. That is, the check can be paid only if the person whose name is written as payee brings it.

3. Cross-check –

It is considered a very safe check as these checks are not cashed but are directly deposited into the person’s account. A cross-check is two parallel lines drawn on the check.

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What is Check Verification?

Check verification is verification by the bank that the check paid by the account holder in the bank is of the correct date, correct person, correct account, or signature or that the check has been issued by Vaidya Bank. Some of the ways to identify whether a check is genuine or fake are as follows

1. Name of the bank on the check

Bankers should ensure that the name of the bank on the check is Vaidya. Nowadays it is found that some fake people are doing fraud in many places by using fake banks. So the bank should be sure that this check has been issued by a Vaidya Bank only.

2. Double Verification –

Sometimes it is very important to call the bank to which the check is issued and ask for information about the check. Therefore, it is important to call the bank from which the check is presented and inquire about the check number the date of issue, and the amount.

3. Routing number-

The ABA routing number was developed by the American Bank Association in 1910. By this routing number, we can identify which financial institution the check belongs to. The routing number is used to ensure that the check is correct.

4. Checking for mistakes on checks-

Sometimes there may be mistakes in the name of the person to whom the payment is to be made on the check, sometimes there may be mistakes between the numerical amount and the written amount, and sometimes there may be mistakes in the date, taking into account all these errors, banks should ensure that the check is correct or not.

5. Counterfeit checks-

Sometimes scammers copy checks by copying the prints printed on the check. In such cases, the banker should check the check by looking at the quality of the check on the check.

How Does A Bank Verify A Check

4 Factors to verify check

1. Check the edges of the check – Look all over the check to see if the check is doctored. If a check looks perfectly smooth, it may be fake. We can identify the check by checking the edges around the check.
2. Paper Quality- Paper quality checks are considered very important for check making. The check is printed on thick matte paper. So if a check comes with a thin paper, consider it as a photo check.
3. Check number– checking whether the check is fake or valid from the check number is very accurate. Based on the check number, bank code, branch code, and MICR code, we can check whether the check is valid or fake.
4. Micr Code- Based on this code the authenticity of the check is checked.

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Important points on checks

1. Name of Account Holder – The name of the person to whom the check is issued must be printed on the check.
2. Signature – The bank should verify that the signature of the person to whom the check is issued is correct.
3. Payee’s Name – The bank should ensure that the name of the person receiving the money is spelled correctly and there is no mistake or spelling mistake in the name.
4. Date – The date on the check is considered to be the most important point. Because any check is considered valid for three months from the date of issue. If the check is past three months, it is called a stale check. If the check is dated three months from today’s date then such a check is called a post-dated check. Such a check is not considered valid in the bank and the payment of such check is not hot.
5. Type of check – Check the type of check received in the bank and decide on banking.
6. Amount of Check – Amount is entered on check-in in two ways. The bank should check whether there is any kind of difference between the one i.e. the literal amount and the second i.e. the numerical amount.