What is Multi City Cheque?

When it comes to making payment of the heavy amounts, many institutions demand cheques instead of accepting digital or any other mode of payment. On the other hand, the canceled cheque has its importance which can not be replaced with any other documents.

Because the cheque is convenient and may be attached to any document as a legal instrument, a canceled cheque is often used when purchasing any expensive service or commodity.

Yet, you will learn about the advantages of multi-city cheques in this post. By the end of this article, you’ll know the difference between a regular and a multi-city check. Also, the multi-city check verification procedure.

Now, before we go any further, let’s clarify what the multi-city cheque is.?

What is a Multi City Cheque?

A multi-city cheque is a piece of paper or a document that can instruct any branch of a given bank anywhere in the country to pay the specified amount to the person named on the cheque. Nevertheless, there is one stipulation: the drawee must have adequate funds in their account. If it bounces, the drawee may be subject to a penalty or legal action.

Assume you’re making a payment of more than $50,000 by check. Before passing the check, the bank will verify it by sending two authorized personnel to verify it. If you are making a payment of more than 50 thousand rupees, the bank will call you to verify some of the crucial details.

Also Read: What is a Cheque and What Are the Various Varieties of Cheques?

What are the Benefit of Multi City Cheque?

Some of the major advantages of multi-city checks include:

  1. A multi-city check has no limit or restrictions for transferring funds to the home branch.
  2. There is a limit on making payments through multi-city cheques if you are not using your home branch.
  3. Regardless of the legend (ceiling) put on the cheque, all mini branches handled by one manager and one clerk have a maximum of 5 lac rupees transferred by cheque.
  4. Saving account holders who are not NRI/HNI can transfer a maximum of 10 lac rupees to any branch other than their home branch.
  5. An NRI or HNI with a savings account, on the other hand, can transfer up to 50 lac rupees.
  6. A person with a current account can transfer up to $50,000 via check or multi-city check.
  7. When visiting a branch other than your home branch, you can only withdraw up to $50,000 in cash for yourself using a multi-city check. You cannot, however, make cash payments to third parties.
  8. The multi-city check has an additional degree of protection. It contains account numbers printed backwards.
  9. Payments of up to 5 lakh rupees are permitted outside of home branches provided both parties are non-home branches.
  10. Cash payment for Multi-City Cheque holders outside of their home branch is limited to a certain amount depending on the kind of account.
  11. To the NRI, HRI, trust, society, and other organizations, a multi-city cheque is issued by default.

The State Bank of India’s fundamental guidelines are as follows. Different banks may have various restrictions for different categories of account holders.

Also Read: How Do I Fill a Self-Check?

What is the Limit of Multi City Cheques?

A multi-city cheque is accepted at all branches except home branches, which is a big advantage. It does, however, have several drawbacks, which are detailed below.

When it comes to SBI, the limit on cash withdrawals using a multi-city cheque has been raised to 1 lac rupees if the money is being taken out for personal use solely. However, the ceiling on third-party payments has been raised to merely fifty thousand rupees.

Previously, you could only withdraw a cash amount of 50,000 INR for yourself. There was also no way to withdraw cash for any of the third-party payments. The elderly, on the other hand, were given permission to withdraw up to ten thousand rupees in cash.

When visiting a branch other than your home branch, you can only withdraw up to $50,000 in cash for yourself using a multi-city check. You cannot, however, make cash payments to third parties.

The State Bank of India, as the most famous government bank, has a restriction of five lac rupees for personal banking customers who use multi-city cheques.

If the drawee is making a payment of more than fifty thousand rupees, the RBI (Reserve Bank of India) has implemented a new rule that will take effect on January 1, 2021.

What is SBI Multi City Cheque?

Customers write an SBI multi-city cheque in the name of any entity or person stated on the check, which is accepted or payable at all SBI branches while adhering to RBI (Reserve Bank of India) terms and conditions.

On the account holder’s request, the bank branch manager prints a multi-city cheque without a ceiling or legend.

It has a 10 lac rupee upper limit for Indian citizens with a savings account. The top limit for savings account holders for NRIs and HNIs, on the other hand, is 50 lac rupees.

However, there is a limit of 50 lac rupees on current accounts of corporations, institutions, and government accounts. It is unlimited in the case of CPAP (Corporate Client Cheques Payable at Par).

Also Read: Crossing of Cheques

Can I Deposit Cheque in Any City?

Yes, you can deposit a multi-city cheque in any branch and in any other city. You must, however, remember the exact terms and restrictions of cash withdrawals and other transactions.

What is a Multi City Cheque vs. a Normal Cheque?

The account holder fills out a multi-city check that may be paid at any bank branch, which is done in the case of actual transactions. The money is deducted from the drawee’s account.

A standard check, on the other hand, is issued by the bank upon your request. It’s also known as a banker’s check, and it’s used to send money to banks.

But, if you want to know the difference between a multi-city and a regular cheque, you’ll need to go into the history of the cheque system.

Previously, when someone issued a check, it had to be taken to the appropriate branch for clearance. The procedure was lengthy and time-consuming, with numerous risks if the check was misplaced.

If the cheque is deceptive or suspicious, the verification process will take longer because there is no effective security layer on the cheque. The bank had to rely on other firms because they lacked transportation and courier services.

The RBI implemented multi-city checks in the banking system in response to these concerns. It becomes easier for banks and their customers after the introduction of the multi-city check. Banks can now accept checks from other branches or cities in their branches, saving time and resources.

It is no longer necessary to transmit checks to other stations. In the local station, clearing checks becomes easier and more convenient. The names of such banks were also mentioned on the backside of the cheque, as well as the remark.

Similarly, international banks with branches in India have begun to accept international cheque payments in accordance with RBI regulations. These are known as multi-city checks.

The establishment of a CBS (Core Banking System) has nearly eliminated the distinctions between regular and multi-city cheques. Because the cheque can be rapidly cleared at any branch, you can state that a multi-city cheque is unnecessary, or that each cheque is a multi-city cheque.

Also Read: What is a Cancel Cheque and Why Do We Require It?

What is the CBS system in banking?

The word CBS refers to the core banking system, which enables banking customers to operate and access their accounts and conduct transactions from any bank branch.

How do I Verify Multi City Cheque?

The best way to check a multi-city check is to glance at the top of the document. The word PAYABLE AT ALL BRANCHES will appear in the upper middle region of the check.

On the other hand, you will not see this phrase in another type of cheque. But, you don’t need to worry about it because if you apply for opening a bank account. Most of the banks will provide you with multi-city checks by default.

To Sum Up

The introduction of multi-city cheques and the core banking system’s facility has alleviated the banking system’s and consumers’ agony. It’s now faster, easier, and more handy than before.

It used to be a difficult and time-consuming process, but now it only takes 3 to 5 working days to clear any check. It is also possible to clear the same branch within the same days.


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