A cheque issued by a bank’s manager promising to pay the payee or an unconditional order to pay a certain amount during a certain period is called a Manager’s Cheque. This cheque is also known as Treasurer’s Cheque, Official Cheque and Certified Cheque.
Manager’s cheque is issued by the bank to an individual who has purchased it. It’s a secured cheque, where all parties involved in its transaction benefit from the use of Manager’s cheque. The most common name for this cheque is a Cashier’s cheque.
The payment on the cheque is made through the direct debit from the account and pay it to the bearer of the cheque. It is as good as cash, either you get the money from your debit card or you can pay it full then and there.
Purpose of Manager’s Cheque
The purpose of the Manager’s Cheque is to make cash available quickly. It is opposite to the standard cheque as the manager’s cheque is equal to cash. Manager’s cheque by its very nature, suggests that it is the order of the bank to pay drawn upon itself.
It is committing in effect its resources, integrity and there is an honour behind the cheque. These cheques are subject to clearance time as personal cheques.
The cheque is made payable to the bearer and it is likely that you can encash it from the same bank and branch where it’s drawn. Manager’s cheque does not pass through the process of cheque clearing house for making the payment.
A drawee cannot return a manager’s cheque properly prepared and disbursement made. It can only be returned under special circumstances such as forgery of cheque, misappropriation or missing information or incomplete cheques or any reason that it was altered to get the benefit by indulging in fraudulent activity.
Click here for What is a Security cheque?
Encashment of Manager’s Cheque
A Manager’s cheque or a Cashier’s cheque is procured from the bank by allocating a certain amount to be debited from the depositor’s account or depositing the same value of cheque to the bank that has to be withdrawn. It can also be paid directly.
If the cheque is provided to you it can be encashed at the same bank and branch. The personal cheques clearance timings are the same even for the manager’s cheques. The encashment of manager cheque can be made at the same bank and funds can be collected without any hassle.
The manager’s cheque is procured from the bank wherein funds are allocated for debiting from the account. The fund amount is set aside from the issuer which can be directly paid or deposited to the bank account of the cheque holder.
Click here for Validity of cheque in UAE
Clearing the Cheque
A new electronic image-based cheque clearing system is introduced by the central bank in UAE. This system has reduced the time period to clear the cheque from five days to four hours. The cheques will clear within a maximum of 36 hours as the system is initially rolled out.
All the account holders are advised to secure the necessary funds before drafting the cheque. The time between the cheque presentation and clearing or settlement is reduced and it is done in a few hours.
The image cheque clearing system technology is a technology that allows the fastest truncation of cheques during the acceptance process. It is a safe, secure and efficient payment system in the UAE. The settlement cycles are shorter and there is a reduced dependency on paper.
The central bank of the UAE adopted a model where cheque envelopes are encapsulated with the images. The central bank of the UAE plays an important role in the delivery and settlement of cheque. It also ensures that settlements happen in a timely and efficient manner.
Importance of Manager’s Cheque in Real estate in UAE
To buy a property in the UAE bank will issue a manager cheque and this cheque can be used for purchasing the properties. The reason that property dealers prefer to accept manager’s cheques is that it is a guaranteed payment. You have to deposit your money with the bank and the bank will issue a manager’s cheque. The bank gives the guarantee to the property dealer regarding making the payment. This is the reason that real estate dealers prefer to accept the manager’s cheque while dealing with the real estate properties.
Reliability of Manager’s Cheque
Manager’s Cheque is a secure Cheque and it is issued by the bank that will purchase it. If the manager’s cheque is lost or stolen or mutilated the bank upon request will void the original cheque and issue another cheque. The bearer of the cheque can withdraw the cheque and should not ignore the cheque by not getting it encashed.
All parties involved in the manager’s cheque get benefited from the use of the manager’s cheque. The person purchasing will pay the amount to the bank and buys the cheque. The payment can be made through cash or direct debit from the account.
The bank gives a guarantee for the payment of the cheque to the party accepting the cheque. It is convenient, safe and reliable for making huge amounts of money with the manager’s cheque.
About the author
Vinay Kumar Goguru is a finance professional with more than 8 years of diverse experience as a researcher, instructor and Industry work experience with both public and private entities. Prior to MyMoneySouq, he spent 6 years in Berkadia, It's a commercial mortgage banking company. He has a "Doctoral Degree in Commerce" and two master's degrees with a specialization in Finance, one as Master of Commerce and other as Master of Business Administration. He has written several articles on personal finance, published by different International journals. He loves traveling, reading and writing is his passion. He has a dream of writing a book on his favorite finance topics.
