Which of the following technologies is used in bank cheque processing?

The correct answer is Magnetic Ink Character Recognition (MICR).

Key Points

• MICR is a technology used primarily in the banking industry for processing cheques efficiently and securely.
• The MICR code is printed on cheques using a special ink made of magnetic particles, typically iron oxide, allowing for easy reading by machines.
• It ensures high-speed processing and minimizes errors in cheque clearing by distinguishing numbers and characters on the cheque.
• MICR is widely used in countries like India, where banks implement the Automated Clearing System for cheque clearance.
• The MICR code consists of 9 digits: the first 3 represent the city, the next 3 represent the bank, and the last 3 represent the branch.

Additional Information

• Optical Character Reader (OCR):
  • OCR is a technology used to convert different types of documents, such as scanned paper documents or images, into editable and searchable digital text.
  • It is commonly used for digitizing printed books, documents, and invoices.
• Barcode Reader:
  • A barcode reader is an electronic device that decodes barcodes, typically used in retail and inventory management.
  • It scans the barcode to retrieve information about the product, such as price and stock details.
• Optical Mark Reader (OMR):
  • OMR is a technology used to detect marks on paper, such as answers in multiple-choice question sheets or survey forms.
  • It is commonly used in educational exams and survey analysis.
• Advantages of MICR:
  • It increases the speed and accuracy of cheque processing.
  • The magnetic ink makes it difficult to forge or alter, enhancing security.
  • It allows for automation, reducing manual intervention and the likelihood of errors.