_______ is used by banking industry for pre printing of characters on the cheque.

Question

Accepted Answer

The correct option is (1):
MICR stands for Magnetic Ink Character Recognition and is the specialized technology universally adopted by the banking industry for the high-speed and secure processing of cheques. The critical characters pre-printed at the bottom of a cheque—including the bank routing number, customer account number, and cheque number—form the MICR line. This data is printed using special magnetic ink (containing iron oxide) and a unique, machine-readable font (like E-13B or CMC-7). The magnetic property of the ink is crucial because it allows the information to be accurately read by dedicated MICR reader-sorter machines, even if the cheque is stamped, signed over, or slightly damaged. This magnetic encoding provides a robust layer of security, making the data difficult to forge or alter, which is a fundamental requirement for negotiable financial instruments.

The incorrect option is (2):
OCR, or Optical Character Recognition, is a general-purpose technology used to convert images of typed or handwritten text into machine-encoded text for editing and searching. While OCR can technically read characters, it relies on optical detection and lacks the critical magnetic ink component that provides security and high-reliability reading in the banking system. Cheque processing requires the ability to read information through stamps, folds, and over-signatures, which the magnetic nature of MICR ink ensures. Standard OCR would be unreliable and susceptible to errors under the typical wear and tear that financial documents experience. Therefore, OCR is too general and lacks the tamper-proof security and reliability features necessary for banking.

The incorrect option is (3):
A Bar Code Reader is designed to scan and decode a pattern of parallel lines (a bar code) into numerical or textual data for applications such as product inventory. Bar codes are not the standard for encoding the essential, human-readable financial characters on the face of a cheque. Using a bar code would eliminate the human-readable aspect of the key financial control line. Moreover, bar codes are highly susceptible to damage from folding or smudging and are not designed for magnetic reading, making them unsuitable for the high-volume, secure, and robust processing required in cheque clearing houses.