Lakh or Lac: Which Is Correct for Your Cheque?
Even with the increasing use of ATMs and online banking, many people still prefer using cheques for large transactions. However, small mistakes on a cheque, such as errors in writing numbers in words, can lead to rejections. One common area of confusion arises when writing amounts in lakhs, especially when deciding whether to use “Lakh” or “Lac.”
For example, if you need to write ₹10,00,000 (10 lakh) on a cheque, the numerical part is easy enough. But the question often arises: should it be written as “Lakh” or “Lac”?
RBI Guidelines on Correct Terminology
The Reserve Bank of India (RBI) has clarified this issue in its guidelines. According to the RBI, the correct term to use is “Lakh.” This is the official term used by the RBI and appears on all bank-issued cheques. In contrast, the term “Lac” is not recognized in official banking terminology.
While writing “Lac” instead of “Lakh” on a cheque is unlikely to cause an immediate rejection, it is still advisable to use “Lakh” as per the RBI’s official recommendation. The term “Lac” can sometimes be confusing, as it is also used to describe a sealing or varnishing material, which could lead to misunderstanding in certain contexts.
Why Use “Lakh”?
- Official Terminology: “Lakh” is the officially recognized term by the Reserve Bank of India (RBI) and is used on all bank documents.
- Clarity: “Lakh” avoids confusion with the term “Lac,” which could refer to something unrelated to currency.
- Consistency: Using “Lakh” ensures uniformity in banking practices and makes transactions more precise.
Importance of Correct Terminology
To avoid any issues or confusion during financial transactions, it’s important to adhere to the correct usage of terms. While it’s understandable that “Lac” is often used in informal contexts, especially in spoken language, in the official and banking realm, “Lakh” should always be used. By following this guideline, you will reduce the chances of errors and ensure that your cheque is processed smoothly.
Key Takeaways
- Always use “Lakh” and not “Lac” when writing amounts in words on cheques.
- The Reserve Bank of India (RBI) officially endorses the use of “Lakh.”
- While “Lac” is commonly used informally, it can cause confusion in banking and financial documents.
- Proper terminology helps ensure accuracy and avoids potential issues with cheque processing.
Conclusion
In conclusion, whether you are issuing or receiving a cheque, it’s crucial to use the correct term—“Lakh.” Following this simple yet important guideline ensures clarity and reduces the risk of errors. By adhering to the official banking terminology, you contribute to a smoother and more efficient transaction process.
