Not being able to sign cheques accurately can create huge problems. here's explaining the implications and the solutions.
Do your hands let you down when you sign that cheque? Does the fear of not being able to reproduce accurately the signatures recorded with your bank psyche you out? While reproducing signatures accurately is something you will have to work on, you can comfort from the fact that you have company. It’s estimated that 40% customers of a bank have a signature problem.
Let’s assume you have walked into a bank to withdraw cash. When you hand over a cheque to the bank teller, he/she compares the signature with the digital signature stored with the bank. Every bank has a signature capture software. This software records the customers’ signature at the time of account opening. If the software detects any discrepancy then the bank dishonours your cheque.
Industry experts say handwritten signature verification is carried out to confirm the identity of the customer. Automated recognition of handwritten signatures gained ground when it was difficult to distinguish genuine signatures from forgeries. Consequently, banks had to adopt computer recognition of handwritten signatures, which is more reliable and efficient. Automatic bank cheque processing refers to the process of extraction and recognition of handwritten or user entered information from different data fields on the cheque.
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Having a ‘signature problem’ is not easy to handle considering its importance for many banking transactions, leave aside other important areas like asset ownership. Not only can there be inconvenience, one can also suffer a monetary loss. The return of a home loan EMI cheque on account of signature difference means that you can be levied charges by both your bank and the bank which advances you the home loan.
So, be it bank, loan or card, it is only your signature that authenticates your document. And, that the mismatch is a one-off occurrence does not normally mean the bank will spare you. Let us assume you have been banking with your neighbourhood bank for several years. But, if your cheque bounces even once, the bank will not take the onus of clearing it. In fact, the bank will not make any adjustment to the substantial bounced-check fees; which costs anywhere between Rs 200-300.
Explains a Mumbai-based executive who banks with a private sector bank, “My cheques have been dishonoured on the grounds that the manual signature does not match with the digital signature. This happened when she wanted to withdraw money over-the-counter. The bank almost took half an hour to sort out the mismatch and ultimately asked her to withdraw money from the ATM. In another instance she had to withdraw a larger amount. She was asked to furnish her identity proof.
Why such a fuss?
Bouncing of a cheque because of a signature mismatch could seem like a minor issue to you, but, it becomes a regulatory issue for banks if they let such cheques go through. Explains a senior banker, “Such customer-centric issues are on the rise because of tightening of norms. Several banks have been slapped penalties on account of flouting KYC norms, especially in the demat scam. So we have to be sure before deposit or withdrawal of a single penny into/from the customers’ accounts.”
“Any overwriting or signature mismatch will lead to rejection of the cheque. We try to help customers to meet their transaction needs by using alternative channels. We cannot take a chance by accepting the cheque as it may lead to KYC problems,” says a service manager with a Mumbai-headquartered MNC bank.
The banks give some leeway in mismatches if the customer is drawing a self cheque. “We overlook some minor changes like an ‘a’ for an ‘e’. Then, we make the alphabet clearer and bring it closer to the digital signature. But even that happens on a case-to-case basis,” the service manager adds.
But if there is a name change or a surname change, the onus lies on the customer to inform the bank.
This especially happens in the case of married women. A customer executive with a private sector bank says, “Most married women change their surname and signature once their passports and other documents are updated. However, if do not inform the bank,it becomes a problem.”
What you need to do
If you have faced a signature mismatch with your bank, just walk into the bank branch. You have to fill up some forms to submit the changed/modified signature.
You have to submit an affidavit, stating that the original account holder and you are the same individual and that the signature has been modified for some personal problems. Then, the bank would take five to six working days to update the digital signature.
Still scared? You can opt for a thumb impression to do away with the signature problem. To do this, you will have to fill up a form – called the vernacular declaration. Every time you want to withdraw money or deposit a cheque, you have to carry an identity proof and put your thumb impression in front of the bank official.
But, this process could get cumbersome over a period of time, especially for a literate customer, say bankers.
