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TABLE OF CONTENTS

1. Introduction of MICR cheque


2. Advantage of MICR cheque
3. Disadvantage of MICR cheque
4. Features of MICR cheque
5. Characters use for MICR code
6. What do the characters mean?
7. Why magnetic ink?
8. Summary

MICR CHEQUE

 MICR cheque is a modern form of cheque,


which minimizes the human efforts and processing
time (MAGNETIC INK CHARACTER
RECOGNITION).

 It is a system that uses a special machine that


types characters on the documents using ink
containing iron oxide.

 These characters can be read by people as well as


by a computer input devices.

 Magnetic Ink characters for bank identification


number, customer account number and cheque number
are preprinted on cheques.

 When a cheque is presented to the bank, the


amount of the transaction is encoded before computer
processing.

Advantages of MICR cheque:


 The clearing time for the cheques is
considerably reduced.

 The MICR characters are easily


readable and as such it reduces
errors.

 Settlement between the banks is


done fast and as such net position is
quickly known.

 It reduces the manual sorting and


totaling work.

Disadvantages of MICR:

 MICR cheques are expensive, as it


requires superior quality paper and
special ink.
 Customers have to be educated in
handling MICR cheques.

 Counterfoils are not permitted in the


cheque book, which may cause
inconvenience to customers.
Features of MICR Cheque

 First six numbers indicate the

cheque number.

 Next three numbers indicate city

code.

 Next three numbers indicates bank

code.
 Next three numbers indicate branch

code.

Characters use for MICR code:

 The most commonly used character set by


MICR devices is known as E13B font
consisting of numerals 0 to 9 and four
special characters shown in fig.

 Coded data in the form of these fonts


are transferred from cheques to a computer
by an MICR reader-sorter.
Characters use for MICR code

What Do The Characters Mean?


1. On-Us Symbol ( )

This character and all the numbers between them is

referred to as the “On-Us” field. This field contains

your account number and possibly our bank’s branch

number and/or cheque number. (Personal cheques

usually have the cheque number here.)The format is

flexible and specified by your bank.

2. Route & Transit Symbol ( )

This character and all the numbers

between them is referred to as the “Route

and Transit” field. This field contains

directions on how to clear the cheque and

generally printed in the upper right hand

corner as a friction. this field indicates the


bank district from which the cheque

should be cleared; the bank or branch

serving the area where the drawee bank is

located; separates items that receive

immediate credit from others for which

credit is deferred; and, also identifies your

bank number as assigned by the RBI.

3. Amount Symbol ( )

This character and all the numbers

between them is referred to as the

“Amount” field. Although the most self-

explanatory field, it seldom receives

notice. This field contains the amount of


the cheque and MICR encoded by the

bank of first deposit.

4. Dash ( )

This character is a “Dash” which is often

placed between long numbers for easier

recognition. The placement of the dash is

specified by the bank.


So Why Magnetic Ink?

MICR documents are processed within the banking

industry on special Reader/Sorter machines. The

reader/sorters will first magnetize the MICR line,

and then read the magnetic signals. Each character, if

printed correctly with the appropriate amount of

magnetic signal unique and identifiable to that

character. The reader/sorters are capable of capturing


and reading information from the MICR line at a rate

of 2400 documents per hour and are sorted for

output into any of 48 different sort pockets. The

magnetic signal’s shapes is developed from two key

element:

1. The character shape – the characters’ horizontal

and vertical attributes.

2. The magnetic content – the amount and

distribution of magnetic material in the ink or toner

from which the character is formed.

If the shape and/or magnetic of the characters do not

meet specified standards, the reader/sorter will

reject the cheque.


Processing of MICR Cheque

 The cheques enter the reading unit; they pass


through a magnetic field causing the particles in the
ink to be magnetized.

 Read heads then interpret these characters by


examining their shapes.

 The sorter is used to sort the cheques into


different pockets according to their identification
code numbers
SUMMARY

“QUALITY IS CRITICAL TO SUCCESSFUL AND


USABLE MICR PRINTING.”
THANK YOU