What is a bank cheque book

Despite the rapid and sweeping changes that have taken the financial and economic sectors in India by storm, especially the Unified Payments Interface (UPI) and a country-wide acceptance of online money transfers, a lot of us continue to use our cheque books in order to make certain payments. Let us understand everything about a bank cheque book in this article, including the parties involved when a cheque-based transaction is carried out; and about “cheque book charges” and their types.

What is a bank cheque book, and who is a cheque book holder?
 

A bank cheque book is a booklet issued to savings account holders in India. A bank cheque book contains paper instruments printed in advance with the account details of the account holder called ‘cheques’ that can be used for making financial transactions by the savings account holder. Consequently, the account holder who receives a cheque book from their bank or financial institution is called a cheque book holder.  

However, in the age of quick and efficient mobile banking apps, cheque book holders can place a cheque book request directly through the mobile banking app.

Which parties are involved when you use your cheque book?
 

Now that you know a little about cheque books and their functions, you must understand five terms that are generally associated with a cheque-based transaction. These are terms that designate three primary parties and two additional parties that are involved in any cheque-based transaction. Read on:

· Cheque drawer: The individual who signs the cheque for the bank or financial institution in question to pay the sum is called the cheque drawer.
 

· Cheque drawee: The bank that is charged with paying the specified sum mentioned on the cheque by the cheque drawer is called the cheque drawee.
 

· Cheque payee: The cheque payee is the beneficiary to whom the cheque drawer pays the amount. 

The parties mentioned above are the three primary parties that form the foundation of any cheque-based financial transaction. Do note that there are a few more additional parties that might be involved:

· Cheque endorser: When any of the three parties mentioned above transfer their right to accept the payment to another party, they become the cheque endorser.

· Cheque endorsee: The party in whose favour the right to accept the payment is transferred is called the cheque endorsee.

What are cheque book charges, and what are their types?

In this section, you will find a list of the various types of cheque book charges generally levied by banks and financial institutions:

1. Banks generally offer one cheque book free per year. However, you must inquire with your bank whether they offer the same service.

2. In certain banks, the customer bears a fee per cheque book  beyond the free issuance limit. 

3. IDFC FIRST Bank offers free cheque book re-issuance services for its Savings Accounts, subject to maintenance of Average Monthly Balance (AMB)

We hope this article on cheque books, their utility, as well as related charges could help you understand this basic banking product. Feel free to revert to this article to clarify any questions you have about cheque books. If you are an IDFC FIRST Bank customer, do consider ordering a cheque book online through the IDFC FIRST Bank mobile banking app.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.