Electronic cheque

1. ELECTRONIC CHEQUE
Presented by:
Emmanual Jose

2. Definition :
The electronic cheque is defined under the New section 6 (a) of the
negotiable instruments act As follows:
“ A cheque is the electronic form means a cheque which contains the
exact mirror image of a paper cheque, and is generated, written and
signed in a signature (with or without
Biometrics signature) and a symmetric crypto system”

3. Features of e-cheque:
1) It is the exact mirror image of a paper cheque. In other words
It is the electronic image of a paper cheque.
2) It is generated, written and signed in a secured manner using
Digital signature which has been legally recognized.
3) It may or may not have bio-metric signature.
4) Digital signature of the drawer is compulsory.
5) There should be minimum standards like asymmetric
crypto system

4. Process of preparing E-Cheque:
Stage 1: prepare a physical paper cheque as usual with all details like date
Name of the payee, amount, signature, etc.
Stage 2: scan the paper cheque so prepared and create an electronic image
Of the cheque.
Stage 3: add digital signature to the e-cheque
Stage 4: make it secure under the asymmetric crypto system by using the
Private key of the drawer.
Stage 5: add biometric signature to the e-cheque if designed

5. Stage 6: forward the e-cheque to the payee through e-mail or internet
Stage 7: the drawee bank is bound to honour it after verifying the digital
signature

6. Mechanism of e-cheque:
1) The drawer prepares the e-cheque in his computer with the help of a
Specialized software.
2) He enters All the particulars like name of the drawee bank, date, payee
Amount, signature etc. and fill them up.
3) He signs the same with his digital signature.
4) It is then forwarded to the payee through e-mail or internet.
5) The payee, up on receiving the e-mail, opens the
e-cheque with a specialized software.

7. 6) After verifying the authenticity of the drawers signature, he endorses it
As usual for getting payment. He also writes out a deposit slip and signs
The same with his digital signature.
7) Then the payee forwards the e-cheque along with the deposit slip to his
Bank through e-mail.
8) The payees bank verifies the signature of the drawer and the payee and
Then forwards it to the drawers bank.
9)The drawers banker verifies the signature of the drawer and honours it
By debiting the account of the drawer and effecting payment
to the payees bank by crediting its account.

8. Process of e-cheque:

9. Advantages:
1) Offer more convenience
2) Any time cheque
3) Less expensive
4) Avoids loss in transit
5) More protection
6) Avoids delay in payment
7) Facilitates e-banking