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A current account is a deposit account available at all banking institutions in Malaysia and can be used for either personal or business purposes. As a current account holder, you are allowed to use cheques as a way to make payments. However do be sure that you are well informed of the things you need to know about using cheques before making any payments.
 
 
     
   
   
     
 
Name of your banking institution which is also called the “drawee bank” or paying bank.
   
“Account Payee Only” crossing is a directive to the collecting banking institution to pay into the account of the payee.
   
Payee is the person to whom the cheque is to be made. Ensure that the name of the person is correctly spelt and written close to the words “Pay To”. Draw a line on the space after the payee’s name to avoid alteration.
   
Date of the cheque. To be able to receive payment, the date must be the current date. The date must be written in DDMMYY format, the first two digits for the day, the next two digits for the month and the last two digits for the year.
   
The person who holds and presents the cheque at the banking institution. It is advisable to cross out “or bearer” to avoid any stolen cheque from being paid out.
   
The payment amount written in words. The same value will be written in the box beside it. Ensure that the amount in words and figures are written close to the words “Ringgit Malaysia” and “RM” printed out in the cheque. Do not leave any gap by drawing a line after them. Make sure that the amount in words and figures tally, otherwise the bank will return the cheque.
   
Name of the account holder which is also called the "drawer name".
   
Your signature as the drawer of the cheque. You should ensure that your signature does not extend into the amount box.
   
Cheque ID.
   
Serial number of the cheque. Each cheque has a different number for identification purposes.
   
Bank code*.
   
Branch code*.
   
Your current account number.
   
Transaction code.
   
Amount field.
 
     
    * Some banking institutions may print the bank and branch code at the top right corner above the date box  
     
     
     
   
 
Do make sure your account has sufficient funds before issuing a cheque.
Do write clearly and always use permanent ink pens such as a ball pen.

Do make sure there are no amendments on the face of the cheque as banks will reject them.
Do always end with the word “only” after writing the amount payable on the cheque.

Do ensure that no cheque is removed without your knowledge and spoiled cheques are completely disposed of.

Do keep your cheques in a safe place and never leave signed or unsigned cheques unguarded.

Do regularly take stock of unused cheques and conduct reconciliation of cheques paid with your bank statement.

Do immediately report your case to your bank , if there are missing cheques in your cheque book.
 
     
 
Don’t sign any blank cheque or issue a blank cheque as payment.
Don’t fold, pin or staple written cheques.

Don’t use laser printer, felt tip pen, erasable pen or pencil or other printing techniques that can be easily erased and written over, to write your cheque details.

Don’t write below the MICR (Magenetic Ink Character Recognition) field of the cheque. This will affect clearing of your cheque if you do so.

Don’t issue payments in foreign currency using RM denominated cheques.
 
     
     
     
   
  Your banking institution will decline to pay a cheque which you have issued due
to the following reasons:
 
     
 
Insufficient funds in your account for clearance.
Missing signature(s).
Signature(s) differ from specimen signature.
Post-dated.
Stale cheque (dated 6 months ago).
Amount in words and figures differ.
Alteration on the cheque.
Issuance of a stop payment instruction.
Account closed or “legally blocked” account.
 
   
   
  If this happens, you will be subjected to a penalty imposed by your banking institution. Different banking institutions impose different amounts, usually from RM100 to RM200.

Your banking institution will track the number of such incidents. If it happens persistently, your banking institution can take action to close your account. This is to safeguard the integrity of cheques as a reliable mode of payment.
 
 
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For more information on cheques, download our booklet on current accounts.
 
 
 
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