11/1/2022 0 Comments Drawee vs accountee![]() ![]() If there is enough balance to effect the transaction then the bank will make payment according to the payer’s instructions. When this step is cleared the bank have to make sure that the payers’ account has eno ugh balance to effect the transaction. The instrument will be physically presented to the bank where the security and other features have to be checked for its validity. Figure 4 below shows how the current information flows when the non-cash payment instrument is used to effect the transaction As it is demonstrated above the customer initiate the payment transaction by any means, in this case the cheque is being used. However, the cheque can be still dishonored for other reasons for example, if it is not signed in accordance with the authority held at the financial institution. In this case if there is insufficient fund the cheque will be dishonored. The payment record that is electronically transmitted to the payer’s financial institution speeds up the process of checking that there are sufficient funds available in the account to make payment. The figure 3 below shows how the cheque is processed if the payee and payer are not using the same financial institution (Bank). The payer’s account is then debited if the cheque is to be paid by the payer’s financial institution. ![]() Usually after filling the deposit cheque form their account will be credited immediately and an electronic payment record containing details from the cheque is created and sent to the cheque writer’s (payer’s) financial institution. ![]() Most people (organization) who receive cheques (payees) deposit them with their own financial institution. In this paper we demonstrate the use of Cheque instrument to represent the rest of tools as it is the most used in non-cash payment instrument in Tanzania. For example in all tool used to effect payment usually must meet the requirements such as the security features like password, signatures, account numbers, account holder names, etc. However the main areas to be checked are the same. As part of the clearance cycle, the cheque you deposit is physically transported from your financial institution to the financial institution where the payer’s account is held and Generally the procedures to effect payment using non-cash payment instruments are similar in all tools though sometimes there some little differences in the process. Since cheques are a paper based payment instrument, they need to be physically presented to the financial institution they are drawn on for payment decisions. The cheque clearance cycle makes it possible for financial institutions to complete the necessary checks to make sure payment is made in accordance with your instructions. When you issue a cheque, you are giving your financial institution written instructions to pay a specific amount from your account. This is done under assumption that the instruction has been originated from the customer even if it’s not. When the information on transaction fulfills the requirements the bank perform the transaction on behalf of the customer according to the instruction being given by their customer. In this kind of payment generally the security features includes the user ID, Password, secret words, fingerprint etc depending on the application the given bank uses to secure their customers assets. For the payment to be made the instrument must have fulfilled all the requirements as per term and conditions being stipulated thereof. Generally the entire paper based payment instrument being agreed between the customer and the bank must have the signature specimen as agreed by both actors. Never fill out a cheque in pencil or ink that can be erased and never sign a cheque before it is completely filled out. not leave gaps between the words and figures, begin the amount in words as close as possible to the left hand side and fill in the amount in figures as close as possible to the TZS sign. Any cheque draft must include the listed features including the signatures specimen of the corporate signatories. Not only that but also the draft of cheque must have features as shown in a corporate cheque draft below Figure 2. above features are mandatory in accordance with BoT cheque standardization in Tanzania. ![]()
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