The reason why businesses are still drawn to checks?

Checks are written or signed instrument that instructs a financial institution to pay a specified amount of money to the bearer. The person or entity that is writing the check is referred to as the drawer or the payor and the person to whom the check was made out is called the payee. The person who draws the check, on another being, is the financial institution where the check is drawn.

The sports checks are able to be cashed or put into. When the payer presents the check to a bank or other financial institution to make a deal, the funds are taken from the bank account of the payor account. It’s another method of instructing the bank to transfer funds from the payment account to the account of the payee or the payee’s account. Checks are generally written against a bank account that is a checking, but they can also be used to get funds from savings or any other type of bank account.

The Finance Ministry has declined the possibility of a ban on checks for pushing digital transactions, saying that it does not have plans to eliminate it. Here’s why Indian businessmen love their checkbooks.

India is going through a massive digital revolution, and just a word of the government’s decision to stop withdrawing checkbooks has caused a lot of controversies. And, why? Because businesses still love their checkbooks to transfer money. Yes, India is moving — slowly — toward a cash-free economy, however, cheques continue to hold significance.

According to RBI figures, in August this year, there were cheques that totaled the sum of 6,224.34 billion, almost three times greater than debit card transactions, and almost 10 times higher than transactions using mobile wallets even with digital transactions increased during the post-Demonetisation period. This is why businesses love checkbooks even in the age of changing digital.


If it’s digital transactions or other forms of the traditional financial instrument, there is a charge associated with it. It is absolutely free to write a cheque.


Cheques have always been an integral part of India’s payments landscape. In the past, businesses have developed a feeling of trust and confidence when it comes to writing cheques. Furthermore, options for securing the payment due in the future can be made with a post-dated check.


Digital transactions are not without Cyber risk. Cheques are safe, they are handed to a third party, and then the person who received the funds into his bank account. It is common for companies to select a safer method especially when a significant amount is involved.


In India which is where the majority of people are still struggling to get used to the digital revolution, particularly in small cities and rural areas, writing a cheque is much more comfortable than using a smartphone and entering the password and also making sure that the network has strength such as internet connection.

However, cheques do have their drawbacks, too. Although online transactions are instant and secure, cheques could take between 2 and 5 days to clear, however in the event that it’s safer and free of charge it is why businesses would switch to another method of payment without some incentive.

Pinky Khanna an expert in Personal Tax in EY India, says, “Cybersecurity threats, security against fraudulent transactions, and removing transaction fees from digital transactions are a few essential steps which must be taken before the checkbook can be removed from the market. …. In addition, the education of older people and those who live in smaller cities is crucial for making this a success.”