Federal Reserve Bank 's cheque-processing center. This is followed by digits 5 through 8, identifying the specific bank served by that cheque-processing center.
Stories Cheques Cheques evolved from letters written to goldsmith bankers. The first bankers in England were goldsmiths who kept valuables for their customers. Gradually customers realised that they need not withdraw cash themselves, but could write to their banker asking him to make a payment from the account to a writing a uk cheque clearing party.
By the end of the 17th century, the cheque was established as a simple way to pay debts. As the business of banking became more organised, bankers started to print cheques ready for the customer to fill in the details.
This, of course, made it easier for the banker to be sure that the cheque or letter was genuine. The pre-printed cheque began to appear from the middle of the eighteenth century.
The definition of a cheque was formalised by the Bills of Exchange Act as 'a bill of exchange drawn on a banker payable on demand. To combat this, banks, in conjunction with paper makers and printers, started to incorporate security features into their cheque papers.
Extra security is provided today by the magnetic line at the foot of the cheque to allow automatic reading, encoding and sorting when the cheques are processed. Between and cheques were printed with the revenue stamp, and were known as medallion cheques.
Cheques were liable for stamp duty until February Clearing Clearing cheques in the eighteenth-century consisted of bank clerks calling at a number of banks in London to present cheques for payment and obtain cash in return.
As the use of cheques increased, the clerks had to cover a larger distance on their daily rounds. The clerks therefore devised a scheme where they met daily at a central point in the City to exchange cheques and settle the difference between the totals exchanged.
The advantages of the system were soon recognised by the banks, and a room was hired where the clerks could meet and exchange cheques in private. As the volume of work increased, more space was required by the clerks, so in a Clearing House was built in London.
It was built for the use of the private banks, and membership of the Clearing House was not granted to a joint stock bank until Barclay, Bevan and Co, one of a number of private banks which amalgamated in to form Barclay and Company Limited, was a member of the London Clearing House.
It was out of this private bank that Barclays' clearing department emerged. The department was situated in head office at 54 Lombard Street and later, inat St Swithins Lane. Country banks were initially not involved in the London Clearing House, and instead sent their cheques direct to the banks upon which they were drawn.
This system caused great delays in payment, and mistakes were commonplace. William Gillett, a member of an established banking family, came up with the idea of Country Clearing in He originally suggested establishing a separate clearing house in London for country banks but the London Clearing House stepped in and offered to clear cheques drawn on country banks through their London agents.
Each London bank acted as agent for a number of country banks. The development of this system contributed to an increase in country branches throughout the UK.
Provincial clearing houses were established in major cities throughout the UK to facilitate the clearing of cheques on banks in the same town. InBarclays Clearing Department at St Swithins in London moved to Northampton, thus centralising the process on one custom-built site.
Automation began in the s with the invention of magnetic ink character recognition, enabling cheques to be read by new reader-sorter machines.
Inautomation was introduced to the Barclays Clearing Department. Cheques were encoded and fed into the machines which processed the cheques at a speed of approximately 1, per minute.Dec 13, · CHEQUE Definition of cheque is under section 73, a cheque is a bill of exchange drawn on a banker and payable on demand.
The characteristics of cheque is it is an unconditional order in writing. “ Writing ” has been in section 3 of the Interpretation Act, to include all modes of representing or reproducing in visible form.
Cheque 1 - Download as Word Doc .doc /.docx), PDF File .pdf), Text File .txt) or read online. Scribd is the world's largest social reading and publishing site. Search Search. Cheque Clearing Process When you deposit a cheque into your account, your bank which is the collecting bank will send it to specific clearing centres to be .
Write the Date.
The date line appears in the top right-hand corner of the cheque. In this field, you generally will write the day you are writing the cheque although you can post date a . A new, easier and quicker method of clearing cheques has now been introduced across the UK.
Called the Image Clearing System, it enables images of cheques to be exchanged between banks and building societies instead of moving paper around the country. A cheque that can only be deposited into the bank account of the named payee.
In the UK, a cheque is a bearer instrument even though there is a named payee.