Electronic Cheque (E-cheque) and Truncated Cheque in India

What is an Electronic Cheque?

1) The definition is given in Section 6 of the Negotiable Instruments Act, 1881 (Act No. 26 of 1881).

2) It simply simply a cheque which is drawn in electronic form by using of computer resources.

3) Electronic cheque, in short, is called as E-cheque.

4) An e-cheque has to be signed in a secure system with digital signature (with or without biometrics signature) and asymmetric crypto system or with electronic signature, as the case may be.

What is a Truncated Cheque?

1) The definition of 'a truncated cheque' is given in Section 6 of the Negotiable Instruments Act, 1881.

2) It means a cheque which is truncated during the course of a clearing cycle.

3) It is truncated either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing.

In accordance with Section 81A of the Information Technology Act, 2000, the provisions of this Act shall be applicable to, or in relation to, electronic cheques and the truncated cheques.