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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 is a modern form of cheque,

which minimizes the human efforts and processing

 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

Advantages of MICR cheque:

 The clearing time for the cheques is
considerably reduced.

 The MICR characters are easily

readable and as such it reduces

 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


 Next three numbers indicates bank

 Next three numbers indicate branch


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


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