Banks use Magnetic Ink Character Recognition (MICR) scanners for cheque processing in the following way:
1. **Reading MICR Line:** MICR scanners are specifically designed to read the MICR line at the bottom of cheques. This line contains important information such as the bank routing number, account number, and cheque number, which are printed in a special magnetic ink that can be easily read by the scanner.
2. **Verification and Validation:** Once the MICR scanner reads the information from the MICR line, it verifies the accuracy of the data by checking it against the bank's database. This helps ensure that the cheque is legitimate and that the information matches the bank's records.
3. **Sorting and Routing:** After verification, the MICR scanner sorts the cheques based on their destination. It reads the routing number to determine which bank the cheque belongs to and then routes it accordingly for further processing.
4. **Data Capture:** MICR scanners also capture data from the cheques, including the amount of the cheque, date, payee information, and any other relevant details. This data is then stored electronically for record-keeping and further processing.
5. **Increased Efficiency:** By automating the process of cheque processing using MICR scanners, banks can increase efficiency, reduce errors, and speed up the overall processing time. This technology helps banks streamline their operations and provide faster and more accurate service to customers.
In summary, MICR scanners play a crucial role in cheque processing by reading, verifying, sorting, and capturing data from cheques, ultimately helping banks process transactions efficiently and securely.
