Tuesday, November 30, 2010

The Banking Rules

For a high context culture, India certainly has a lot of rules when it comes to writing, cashing, and depositing bank checks. Here's a quick rundown of my "favorites":

Rule #1 - The "payable to" name must be EXACTLY the same as the name on the bank account.
Lindsay received a check that was payable to "Lindsay Luth". Unfortunately, the name on her account reads "Lindsay C. Luth". While it's nice to know they're concerned about fraudulent acts like people trying to deposit checks that don't belong to them, I've got to guess that Lindsay's name is fairly unique at our Indian bank. I'd also have to guess that the the risk of Lindsay Luth defrauding Lindsay C. Luth is a risk worth taking.

Rule #2 - Don't notate the number of paise (100 paise = 1 rupee) as a fraction of 100 when writing out the amount payable.
In the U.S. when writing a check (for those that still write checks), you still have to write out the words for the number of dollars but have the luxury of noting the number of cents as a fraction. In other words, if your check is for $5.43, you would write, "Five and 43/100". In India, if you write a check for Rs. 5.43 (which you likely never would because it's like twelve cents), you need to write "Five Rupees and Forty-Three Paise". I just found this one out because Airtel, my cell phone company, decided they wouldn't accept my check and my cell phone bill went unpaid. Two things I found odd about how they handled the situation, (1) I had been doing this for months without any issues and (2) the form letter they included with the returned check had a closing salutation from the Chief Customer Care Officer that was unsigned but included the clause, "Please note that this is a computer-generated letter and does not require a signature." Nice to know they could automate that but still require me to write out the stupid number of paise on my check.

Special note on Rule #2: I'm not totally convinced this is really the case. I find it odd that it got denied just this one time. Of course, maybe I should just round up to the next rupee and save myself the trouble. I mean, seriously, I write 3 checks a month, so at worst we're talking $0.87 TOTAL over the next 13 months of my assignment. I'll stop talking now.

Rule #3 - When you go to the ATM to deposit a check, you don't actually use the ATM.
When you deposit a check in the U.S., it's basically the exact opposite of taking cash out of an ATM. You enter in the amount of the check and dutifully insert it into the machine. In India, they just have a drop box. It's a locked box that is in no way hooked to the ATM. You fill out a deposit slip or envelope, insert your check, and just hope it ends up at the bank. I've yet to have an issue with this, but it's still a bit of a leap of faith each time you visit the ATM drop box. The first time I used the drop box, I checked with about four different people at the office to make sure that was REALLY the process.

Rule #4 - Endorsing checks is not necessary when depositing a check at the ATM drop box
Once you get comfortable with the whole drop box concept, the next step is getting comfortable with the fact that the check you're depositing into a locked box with no guarantee it will be deposited has not been signed by you. The concept of endorsing doesn't exist, at least based on what I've been told. There's just something a little odd about there not being physical proof on the check was ever in my possession. When in the U.S., I typically will add a "For Deposit Only" line under my endorsement. Whether or not that actually makes a difference, I couldn't tell you. What I can tell you is that I feel more comfortable writing that three word statement on the back of my check.

At the end of the day, none of these things is really a big deal. However, it is a good example of how something you'd expect to be fairly simple and straightforward can cause a little bit of angst, uneasiness, and (what you would think would be) unnecessary minor stress when you move to a strange exotic land.

On a final note, I wanted to wish my big sister Anne a very happy __th birthday today. I was going to send a check, but as you can tell from the post, Anne, it's a little more complicated than one would hope. That, and I'm not sure you'd have much use for those rupees in Kansas. Hope you have a great day!
Anne and I when home during my October homestay (you know, when she was a year younger)


  1. This is spot-on. We experienced every single one of these!

  2. Yeppers! I'm actually mouth agape that Lindsay HAS a checking account! You mean, it's not just SIR that gets a checking account? :) (wink)

  3. Very funny, it's quite possible we have the only bank account in India where SIR is the joint name!

  4. In regards to #2 I'm wondering if you did round up the amount on the check, it might also be cause for it to be rejected! I can just imagine it now "I'm sorry sir. We cannot be accepting this check. It is for an incorrect amount. It is more than the amount of the bill and we are not giving change." :-P

  5. I hadn't thought about that but you very well may be correct. We accidentally left a tip on the lunch bill last weekend that already had a service charge included and the waiter literally chased us down outside the restaurant to try and return the extra.

  6. Thank you very much for valuable information…Your article is helpful !

  7. about #4 you typically put 2 lines diagonally on the left hand corner of the check and write a/c payee only . that way it would only get deposited in a bank account making it easier to track in case of any problem

  8. ^^^^^^^
    Put 2 lines diagonally on the left hand corner of the check and write a/c payee.
    Correct procedure...