What Is MICR?
MICR (Magnetic Ink Character Recognition) is a software application utilised to guarantee the genuineness and fasten the clearing of paper-based documents, particularly cheques. It entails the magnetic ink impression that can be read by human beings as well as by machines.
Process Of MICR
- Cheque Issuance: The cheque is printed with magnetic ink at the bottom, including the cheque number, bank code, branch code, and account number.
- Cheque Submission: When submitted, the cheque is scanned by an MICR reader.
- Magnetic Reading: The reader magnetises the ink and reads the magnetic signals from the printed characters.
- Data Processing: Captured data is verified and sent to the clearing system for clearing between banks.
Advantages Of MICR
- Speed and Efficiency: Speeds up cheque clearing and reduces manual handling.
- Accuracy: High degree of accuracy in reading with hardly any errors.
- Security: Resistant to counterfeiting or alteration because of magnetic ink.
- Dual Reading: Both humans and computers can read it.
- Permanence: Magnetic ink won't bleed even if the cheque is stamped or light printed.
Key Takeaways
MICR (Magnetic Ink Character Recognition) is application software used by banks to read and process highly accurate magnetic ink cheques. It is of high accuracy, anti-fraud, enables rapid data capture and is machine and human-readable, thus accelerating cheque clearing and making it more uniform.
