According to the guidelines issued by the Reserve Bank of India (RBI), the preferred spelling for writing an amount of 1,00,000 on cheques is ‘Lakh’ instead of ‘Lac’, yet ‘Lac’ will not result in the cancellation of cheques. This clearing of doubts is in the area of cheque writing, which is the most frequent meltdown, and hence it comes up with a solution that the users do not have to worry about it unnecessarily.
RBI’s Official Preference
The English spelling for 100,000 currency notes is ‘Lakh’ per the RBI circular, which is also used on their website. The public is not obliged to use it, but it is still the banks’ internal instructions that they should be consistent in their use of the spelling. According to the dictionaries, ‘Lac’ is a type of resin, which is not a financial term.
No Risk of Cheque Rejection
If one writes ‘Lac’ on the cheque, it would not be the cause for the cheque to bounce or be dishonoured, as it is the figures and words that banks care about, rather than the spelling. The figure ‘Lac’ is mostly used in Indian over the figure ‘Lakh’, and hence it is very common in banks. Other institutions also consider the spelling of the word less important, as long as clarity is maintained. But, experts still suggest using ‘Lakh’ if one wants to keep a high level of professionalism in transactions of large sums.
Why ‘Lakh’ Matters
The usage of ‘Lakh’ would comply with the official standards, and thus there would be less chance of the occurrence of disputes in the automated systems. It is also an advantage derived from the Indian numbering system, while ‘Lac’ has a non-financial connotation. Just a little adjustment: Write “Ten Lakh Only” for certainty.
Best Practices for Cheques
Always use ink that cannot be erased, ensure that the amounts are the same, and use ‘Lakh’ in order to be compliant with the regulations. The RBI has stated that while spelling can be a barrier, in the case of CTS clearance, it is still the writing that is the most user-friendly.
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