Cheque Transactions Overview

Complete guide to cheque processing in BankLingo V2 Core Banking Platform.

Overview

Cheque transactions handle the complete cheque lifecycle from deposit/issuance to clearing or bouncing. BankLingo V2 implements a robust cheque transaction processing engine with:

Multi-state processing: PENDING → UNCLEARED → CLEARED/BOUNCED
Hold management: Prevents premature fund access
Clearing cycle tracking: Complete audit trail
Settlement integration: Automatic GL postings
Complete reversal: Bounce and cancellation support
Inter-bank clearing: Integration with clearing house

Transaction Types

Cheque Operations

Transaction	Purpose	V2 Command	Key Features
Cheque Deposit	Deposit cheque (uncleared)	`InitiateChequeDepositCommand`	Hold placement, clearing cycle, pending state management
Cheque Withdrawal	Issue cheque for withdrawal	`InitiateChequeWithdrawalCommand`	Cheque issuance, signature verification, stop payment support
Clear Cheque	Clear deposited cheque	`InitiateClearChequeCommand`	Fund release, hold removal, GL settlement
Bounce Cheque	Bounce deposited cheque	`InitiateBounceChequeCommand`	Reversal, penalty charges, notification
Cancel Cheque	Cancel cheque withdrawal	`InitiateCancelChequeCommand`	Stop payment, reversal, cancellation fee

For complete technical documentation, see Cheque Transaction - Technical Flow.

Transaction States

Cheque transactions follow a specialized state machine:

States Explained:

PENDING: Cheque transaction created, awaiting initial processing
UNCLEARED: Cheque deposited, in clearing cycle (funds held)
CLEARED: Clearing successful, funds released to customer
BOUNCED: Clearing failed, cheque returned unpaid, reversal created
CANCELLED: Cheque cancelled before clearing (stop payment)
REVERSED: Administrative reversal (rare, post-clearing correction)

Core Concepts

Cheque Deposit Flow

Process:

Customer Presents Cheque: Physical cheque submitted to teller
Verification: Teller verifies cheque details (date, signature, amount, payee)
System Entry: Create cheque deposit transaction (PENDING → UNCLEARED)
Hold Placement: Funds held in account (not available for withdrawal)
Clearing Submission: Cheque sent to clearing house (same-day or next-day)
Clearing Result:
- SUCCESS: Cheque cleared → Release hold → Funds available (CLEARED)
- FAILURE: Cheque bounced → Reverse transaction → Penalty charged (BOUNCED)

Timeline:

Day 0 (Deposit):
  Time 09:00 - Cheque deposited (UNCLEARED)
  Time 09:00 - Hold placed on account
  Time 16:00 - Cheque sent to clearing house

Day 1 (Clearing):
  Time 14:00 - Clearing result received
  
  Success Path:
    Time 14:01 - Release hold (CLEARED)
    Time 14:01 - Funds available to customer
    
  Failure Path:
    Time 14:01 - Reverse transaction (BOUNCED)
    Time 14:01 - Charge penalty fee
    Time 14:02 - Notify customer

Cheque Withdrawal Flow

Process:

Customer Requests Cheque: Withdrawal via cheque instead of cash
Verification: Verify account balance and withdrawal limit
System Entry: Create cheque withdrawal transaction (PENDING)
Cheque Issuance: Print/issue physical cheque to customer
Cheque Presented: Payee presents cheque for payment (could be days/weeks later)
Clearing Result:
- HONOURED: Cheque paid → Debit customer account (COMPLETED)
- STOPPED: Stop payment requested → Reject cheque → Reversal (CANCELLED)

Hold Management

Cheque deposits use hold management to prevent premature fund access:

Two Balance Types:

BookBalance: Includes uncleared cheque amount
AvailableBalance: Excludes uncleared cheque (BookBalance - HoldAmount)

Process:

UNCLEARED: BookBalance increased, HoldAmount increased (AvailableBalance unchanged)
CLEARED: HoldAmount released (AvailableBalance increased)
BOUNCED: BookBalance reduced, HoldAmount released (reversal)

Example:

Initial State:
  BookBalance: 10,000
  HoldAmount: 0
  AvailableBalance: 10,000

Deposit Cheque 5,000 (UNCLEARED):
  BookBalance: 15,000 (+5,000)
  HoldAmount: 5,000 (+5,000)
  AvailableBalance: 10,000 (no change - funds held)

Cheque Clears (CLEARED):
  BookBalance: 15,000 (no change)
  HoldAmount: 0 (-5,000)
  AvailableBalance: 15,000 (+5,000 - funds released)

Alternative - Cheque Bounces (BOUNCED):
  BookBalance: 10,000 (-5,000 reversal)
  HoldAmount: 0 (-5,000)
  AvailableBalance: 10,000 (back to original)
  Penalty Fee: 500 (charged to account)

Impact Tracking

Every cheque transaction records exactly what changed:

ImpactedEntity {
  entityType: "DepositAccount"
  entityId: 12345
  fieldName: "HoldAmount"
  oldValue: 0
  newValue: 5000
  deltaAmount: +5000  // Hold placed for uncleared cheque
}

GL Integration

All cheque transactions automatically post to General Ledger:

Cheque Deposit (UNCLEARED):

DR: Uncleared Cheques Account      +5,000
CR: Customer Deposits               -5,000

Cheque Clearing (CLEARED):

DR: Customer Deposits               +5,000
CR: Uncleared Cheques Account       -5,000

Cheque Bounce (BOUNCED):

Reversal Entry:
DR: Customer Deposits               +5,000
CR: Uncleared Cheques Account       -5,000

Penalty Entry:
DR: Customer Deposits               +500
CR: Fee Income                      -500

Clearing Integration

Same-Bank Cheques

Cheques drawn on the same bank (internal clearing):

Instant Verification: Check drawer account balance immediately
Fast Clearing: Can clear same-day or within hours
Lower Risk: Internal validation, no external clearing house

Inter-Bank Cheques

Cheques drawn on other banks (external clearing):

Clearing House: Submitted to national clearing house (e.g., NIBSS in Nigeria)
Clearing Cycle: Typically 1-3 business days
Higher Risk: Dependent on external bank, potential for bounce

Clearing Timelines

Cheque Type	Clearing Time	Availability
Same-Bank (Local Branch)	Same day	Next business day
Same-Bank (Other Branch)	1 business day	2 business days
Inter-Bank (Local)	1-2 business days	3 business days
Inter-Bank (Upcountry)	2-3 business days	4-5 business days
Foreign Cheque	10-21 business days	22+ business days

Approval Workflows

Cheque transactions can require approval based on:

Transaction amount (threshold)
Account type
Cheque age (stale cheque > 6 months)
Payee verification
Signature discrepancies

Workflow:

Initiate Cheque Transaction (PENDING)
    ↓
Physical Cheque Verification
    ↓
Check Approval Requirement
    ↓
Auto-Approve OR Await Approval
    ↓
Submit to Clearing House (UNCLEARED)
    ↓
Await Clearing Result
    ↓
Clear (CLEARED) OR Bounce (BOUNCED)

API Integration

All cheque transactions are executed via BPMCore command pattern:

Endpoint:

POST /api/bpm/cmd
Content-Type: application/json
Authorization: Bearer {access_token}

Request Structure - Cheque Deposit:

{
  "commandName": "InitiateChequeDepositCommand",
  "data": {
    "accountEncodedKey": "ACC-001",
    "amount": 5000.00,
    "chequeNumber": "CHQ-123456",
    "drawerBank": "BANK-XYZ",
    "drawerAccount": "9876543210",
    "chequeDate": "2026-01-04",
    "notes": "Customer cheque deposit"
  }
}

Request Structure - Clear Cheque:

{
  "commandName": "InitiateClearChequeCommand",
  "data": {
    "chequeTransactionId": 12345,
    "clearingDate": "2026-01-05",
    "notes": "Clearing house confirmation"
  }
}

Response:

{
  "isSuccessful": true,
  "statusCode": "00",
  "message": "Cheque deposit successful - funds will be available after clearing",
  "data": {
    "transactionKey": "TXN-2025-001",
    "chequeState": "UNCLEARED",
    "expectedClearingDate": "2026-01-05",
    "holdAmount": 5000.00,
    "availableBalance": 10000.00
  }
}

Error Handling

All transactions use standard error codes:

Error Code	Description	Action
`00`	Success	Transaction completed
`05`	Account closed/locked	Cannot deposit
`12`	Invalid cheque details	Verify cheque
`14`	Stale cheque (> 6 months)	Request new cheque
`34`	Insufficient funds (withdrawal)	Cannot issue
`51`	Limit exceeded	Reduce amount
`61`	Cheque bounced	Charge penalty
`91`	System error	Retry or contact support

Best Practices

For Tellers

Verify cheque date (not post-dated, not stale)
Verify signature matches account records
Verify payee name (for deposit)
Check for alterations or forgery signs
Capture cheque image (front and back)
Inform customer of clearing timeline

For Customers

Write cheques clearly and legibly
Ensure sufficient funds before issuing
Deposit cheques promptly (within 6 months)
Report lost/stolen cheques immediately
Monitor account for bounced cheques
Avoid post-dated cheques if possible

For Developers

Always track hold placement and release
Implement proper clearing cycle state management
Handle bounce scenarios gracefully
Test concurrent cheque deposits
Log all state transitions for audit
Support reversal for both cleared and bounced cheques

Next Steps

Explore cheque processing:

Cheque Transaction - Complete Technical Flow →

Related operations:

See Deposit Transactions - Cash deposits and withdrawals
See Teller Transactions - Teller operations
See API Reference - Cheque Transactions (./developer/)

Last Updated: January 4, 2026
Version: 2.0
Status: Production Ready

Overview​

Transaction Types​

Cheque Operations​

Transaction States​

Core Concepts​

Cheque Deposit Flow​

Cheque Withdrawal Flow​

Hold Management​

Impact Tracking​

GL Integration​

Clearing Integration​

Same-Bank Cheques​

Inter-Bank Cheques​

Clearing Timelines​

Approval Workflows​

API Integration​

Error Handling​

Best Practices​

For Tellers​

For Customers​

For Developers​

Next Steps​

Overview

Transaction Types

Cheque Operations

Transaction States

Core Concepts

Cheque Deposit Flow

Cheque Withdrawal Flow

Hold Management

Impact Tracking

GL Integration

Clearing Integration

Same-Bank Cheques

Inter-Bank Cheques

Clearing Timelines

Approval Workflows

API Integration

Error Handling

Best Practices

For Tellers

For Customers

For Developers

Next Steps