2021 6th International Conference for Convergence in Technology (I2CT)
Pune, India. Apr 02-04, 2021
Online Digital Cheque Clearance and Verification
System using Block Chain
Bogahawatte W.W.M.K.A
Department of Computer Systems Department of Computer Systems
Engineering
Sri Lanka Institute of Information Sri Lanka Institute of Information
Technology
Malabe, Sri Lanka
it17139786@my.sliit.lk
Kavindi M.A.T
Department of Computer Systems Department of Computer Systems
Engineering
Sri Lanka Institute of Information Sri Lanka Institute of Information
Technology
Malabe, Sri Lanka
2021 6th International Conference for Convergence in Technology (I2CT) | 978-1-7281-8876-8/21/$31.00 ©2021 IEEE | DOI: 10.1109/I2CT51068.2021.9418132
it17403948@my.sliit.lk
Abstract— Cheque Truncation System (CTS) is an image-
based cheque clearing framework used in Sri Lanka. This semi
manual process has certain limitations and takes up to 3
working days to clear an inter-bank national cheque in Sri
Lanka. Faced with the limitations of this system, cheque users
and commercial banks must need an efficient and a secured
system which can clear a cheque within less than 24 hours
along with providing integrity and confidentiality to the
system. This research portrays an automated solution, which is
feasible for any commercial bank in Sri Lanka, to address
above-mentioned issues. The proposed system is based on the
blockchain where all banks willing to take an interest in this
framework must connect the proposed blockchain based
system to supply the quicker cheque clearance to its clients.
Answers were proposed with a complete framework consisting
of four main phases: (i) paper cheque clearing process, (ii)
digital cheque issuing and clearing process, (iii) cheque fraud
detection process and (iv) cheque transaction securing process.
Python along with Flutter framework and Ethereum were the
major technologies used for implementing the system. The
proposed system is highly scalable as Ethereum provides added
integrity to the system. The approach advocates the customer
as well as the bank with much simpler and speedier cheque
clearing process with increased security. It also contributes
with a paper cheque fraud detection system with faster and
reliable results. The proposed system provides benefits to the
user as well as the bank by addressing the requirement of
producing a secure, effective and environment friendly system.
Finally, CheckMate permits a consistent stream of cheque
clearance operation for the payer and the payee without any
mediators.
Keywords—blockchain, cheque, fraudster, image processing,
OTP
I. INTRODUCTION
A Cheque is one of the most predominant reports of a
bank where being duplicated is greatest. Cheques are
the excessively delighted non-cash payment method
with about 96.8 billion dollars worthy worldwide in 2018
[1]. Clearing a cheque is a tiresome and a time-consuming
task. In Sri Lanka, the current cheque clearing system is a
semi-manual process. Cheque Imaging and Truncation (CIT)
System which commenced operations on 11th May 2006,
reduced the time taken for clearing and settlement of
978-1-7281-8876-8/21/$31.00 ©2021 IEEE
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Isuri Samanmali A.H.L Perera K.D.M
Department of Computer Systems
Engineering Engineering
Sri Lanka Institute of Information
Technology Technology
Malabe, Sri Lanka Malabe, Sri Lanka
it17124454@my.sliit.lk it16075504@my.sliit.lk
Senaratne A.N Rupasinghe L.P
Department of Computer Systems
Engineering Engineering
Sri Lanka Institute of Information
Technology Technology
Malabe, Sri Lanka Malabe, Sri Lanka
amila.n@sliit.lk lakmal.r@sliit.lk
Fig. 1. Elements of a paper cheque in Sri Lanka
cheques, by avoiding physical delivery and enhancing
efficiency of the system. With the introduction of the CIT
system, cheque clearing time was reduced to T+1, where T is
the day on which clearing house receives the cheque for
clearing and 1 indicates one business day from T, but usually
it takes up to 3 working days to complete the entire process.
Faced with this traditional cheque clearing process, cheque
users and commercial banks need an efficient, and a secured
cheque clearing system which clears a cheque with in less
time.
Presently, frauds executed on cheques had become a
regular incident as technical advancements empower these
frauds to difficult to distinguish. In Sri Lanka, fraudulent
cheques are ordinarily distinguished by bank employees by
utilizing its attributes. Further, several commercial banks use
software development kits (SDK) and scanner based
hardware tools. These procedures are tedious and ineƥcient;
for sure, it is infeasible for arrangement in every commercial
bank.
Through the proposed system, the untouched drawbacks
of the current CIT based cheque clearing systems such as the
time consuming process will be addressed by producing a
secure and effective system which only takes only 5 minutes
to clear a cheque, along with a mechanism for paper cheque
fraud detection. For this, block chain has appeared as a novel
technology and the traditional paper cheques will be replaced
using digital cheques. This paper proposes the utilization of
CheckMate system to the cheque clearing process of
1
commercial banks of Sri Lanka. Mainly the system contains
the following features:
x A mobile and web-based application to handle the
cheque clearing and fraud detection process.
x A prediction algorithm with an accuracy of 80% to
predict the cheque rejection possibilities and reasons.
x A novel mechanism to verify Magnetic ink character
recognition (MICR) field data and handwritten
signature on a paper cheque.
x One-time password (OTP) to verify the cheque
issuer.
II. BACKGROUND AND LITEREATURE SURVEY
A. Cheque Clearing Process in Sri Lanka
The cheques should be cleared once the transaction takes
place. With the presentation of Sri Lankan Cheque Imagine
and Truncation System (CITS) in 2006[2] as shown in Fig. 2,
with the investment of a few part banks, to be specific Hatton
National Bank, Commercial Bank, Cargills Bank, Standard
Chartered Bank and NDB , LankaClear Pvt Ltd(LCPL)
supplanted the past tedious physical cheque clearing
framework with an image based framework, cutting down
the clearing cycle to the following industry day (T+ 1
clearing)[2].
CITS is an image-based cheque clearing framework[2],
which supplanted the physical cheque with electronic data,
streaming all through the clearing cycle. The usage of CITS
is an activity of LankaClear (Pvt) Ltd in relationship with the
Central Bank of Sri Lanka (CBSL) for quicker clearing of
cheques[2]. CITS is intended to acknowledge images and
MICR information of physical cheques submitted either on
CD-ROMs or by direct electronic exchange. As a proportion
of upgrading the security of cheque images during the
transmission and improve the efficiency in the clearing cycle,
in September 2017, LankaClear (Pvt) Ltd[2] empowered the
interest bank to present the pictures and MICR information
of physical cheques. This electronic framework permits the
banks to transfer huge volumes of cheques and start their
clearing very quickly.
B. Drawbacks in the current Cheque Clearing Process
The traditional CITS which use Magnetic ink character
recognition(MICR) and Optical Character
Recognition(OCR) technologies which focuses on the
features of watermarks, ultraviolet light (UV) rays,
pantographic images and various microscopic features on the
scanned copy of the manual cheque has a limited
functionality. Therefore, inconsistency in name and amount,
duplication of features using a photo editing software,
invisible ink usage, and damaged images may lead to
security violations and consequently a forged paper cheque
could be created. This forged cheque may bypass the image
authentication processing system at the clearing house,
which leads to wrong payment by bank to a malicious user.
Most cheque frauds are detected and reported by the drawee
commercial bank. Less often, these frauds are detected and
reported by the collecting commercial bank - where the
cheque is deposited. These Fraudulent cheques are
commonly distinguished using manual identification. Manual
identification, unquestionably, is the least successful activity
to battle against cheque frauds. This requires staff's ability to
distinguish fake cheques dependent on the security highlights
and other visual attributes. Furthermore, if the paper cheque
is damaged, OCR will not be able to detect the cheque.
Hence, its need to be cleared manually by a person. Then the
automation process will not be successful. Moreover, current
CITS based paper cheque clearance requires at least one day
to clear a cheque which could extend up to three working
days. Additionally, the user needs to go to the bank to
deposit cheque with consuming both time and cost.
C. Related Work
Various works had been done on the area, where most of
them does not provide a practical implementation in real
world. Even if the increase of cheque usage of the
individuals and corporations with respect to the other
payments methods, cheque clearing systems specifically
targeting on speeding up the manual clearing process with
the increase of security is not much seen in the existent
market. Most of the automated cheque clearing systems in
the market and different platforms developed owing to
research mainly targets on digital cheques and eliminates
paper cheques completely.
Table 1 represents a relative comparison on existing systems
with their drawbacks compared to the proposed approach.

TABLE I. RELATIVE COMPARISON OF EXISTING SYSTEMS

Appr Published Overview Drawbacks

oach Year
[3] 2019 The approach provides a Paper cheques has
blockchain based cheque been completely
clearance system for digital eliminated in this
cheques. It provides a approach and, only
quick-response (QR) code the digital cheques
generation algorithm were taken into
which performs digital account.
signing of a cheque, and a
novel two-factor
authentication protocol to
generate a time-based one-
time password (TOTP) for
Fig. 2. Current CITS based cheque clearing system secure funds transfer.
Source: Adapted from [2]
[4] 2019 This approach provides a The framework
blockchain based only supports e-
framework for e-cheque cheques and does
clearance. not support paper
cheques.

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 [5] 2014 This approach has This approach
deciphered information requires manual
written in erasable ink that human analysis, is
was removed using the expensive, time-
eraser attached to a magic consuming, and
pen. They use a chemical non-scalable.
solution (NaOH) and
infrared radiation from a
VSC-600 scan converter to
detect alterations.
[6] 2009 Proposed an off-line This approach is
Persian signature based on language
identification and dependent
verification based on methods and
image registration, DWT limited for Persian
(Discrete Wavelet language.
Transform) and fusion.
The authors used DWT for
Features extraction and
Euclidean distance for
comparing features.
[7] 2014 Proposed an approach for This approach Fig. 3. CheckMate System Overview Diagram
fraud analytics for the presents only a
NFC-enabled mobile generic view on
payment system. A multi- the problem and The modified control samples used in the experiments of
layer solution is presented its solution, the paper cheque fraud detection process were created based
where each subsequent avoiding on information obtained from experts and the supporting
layer is responsible 75 for implementation at literature. Fig. 3 shows the system overview diagram of the
separated parts of fraud all. proposed approach.
analysis.
A. Data Description
III. OBJECTIVES OF THE PROPOSED APPROACH Data used consists of past six months records of cheque
user interaction with a current account from People’s Bank-
Main objective of the proposed solution is to speed up a major public bank of Sri Lanka. The dummy data sets used
the cheque clearing process and increase the security of by the bank itself to test their systems were used here.
cheque transactions using CheckMate automated cheque Events have a user id, a timestamp, and event type. For the
clearing system. The proposed solution can provide a section B, there are some categories of events: rejection
24hour service for customers. Further the mobile device- because of insufficient account balance, rejection because of
based technology help users to easily issue and clear both drawer orders to the bank to stop payments, rejection
digital and paper cheques using a simple mobile application because of date not mentioned or written incorrectly and
installed in their mobile devices. The system allows user alternations made on cheque not proved by drawer by giving
(cheque holder) to validate the cheques before converting his/her signature etc.
them into a digital format. The prediction algorithm will
help to identify cheque rejection patterns based on certain B. Paper cheque clearing process and Error Prediction
fields and will validate the appropriate fields orderly. Algorithm
Furthermore, the approach also provides with a productive, 1) Image Processing
versatile technique for distinguishing bank cheque frauds. Character identification is a part of pattern identification
area. Image processing consists of data preprocessing,
IV. METHODOLOGY binarization, noise removal, skew detection and correction,
The implementation of the entire system is done on four character segmentation, thinning and feature extraction.
main phases: (i) Paper cheque clearing process and error Data Preprocessing - When the data has been obtained
prediction algorithm (ii) Paper cheque fraud detection precisely, we continue to pre-process the acquired data. The
process, (iii) Digital cheque issuing and clearing process primary purpose of pre-processing is usually to arrange
using block chain and (iv) Cheque transaction securing content to the consequent character identification process
process. Since different approaches were used for becomes easier. It basically improves the image rendering it
implementing the entire system, and for better understanding desirable for segmentation phase.
of the system flow, methodologies and approaches used for
the four phases are described in section B, C, D, and E Binarization - Usually the binarization strategies of gray
separately. Section A discusses on the used data sets for the scale images are categorized into couple of categories viz
system. entire threshold where solitary threshold is utilized in the
overall image to form a pair of classes (words and
The sample tests were scanned at 600 dpi resolution background) and local threshold wherever values of
using an android mobile device. The system supports android thresholds are decided locally, pixel-by-pixel or perhaps
versions Lollipop 5.0 – 5.1.1 and API Level 21 – 22 and region-by-region. Right here, it computes threshold Th out of
upper versions. The 600-dpi resolution was chosen for every single pixel locally by equation (1). There k is put to
scanning as this is the industry standard. The user is 0.5, m is the mean of all pixels in frame; M is the least image
encouraged to adjust the paper cheque accurately in the start grey degree σ is the standard deviation of each and every
of the process. Predefined edges were made for cheque, so pixels in frame and R is the optimum deviation of grayscale
the necessary highlights could be removed in a helpful way. on all frames.

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 ఙ
݄ܶ ൌ ሺͳ െ ݇ሻǤ ݉ ൅ ݇Ǥ (1)
ோሺ௠ିெሻ
Noise Removal - The scanned paper cheques frequently
consist of noise which occurs because of printing device,
print quality, cheque age range etc. Thus, it is essential to
filtering noise prior to the image is processed.
Skew Detection and Correction - Once the paper cheque
is fed into mobile phone camera oftentimes automatically or
manually some sort of recline or skew is inescapable. In
skew viewpoint the text lines in computerized image create
angle with crosswise direction.
Character Segmentation - When the paper cheque image
is binarized, noise eliminated and skew adjusted, the real text
text-based content is extracted. This process guides to
character segmentation. The frequently used segmentation
formulas in this direction are connected component labeling,
x-y tree disintegration, operate length smearing and Hough
transform. Right here Hough transform was utilized for
character segmentation.
Thinning - When thinning width of one-pixel depiction or
skeleton of an item is acquired by conserving connectedness
of the item and its end points. The actual thinning process
decrease image ingredients to their important information so
that additional analysis and identification are facilitated.
Feature Extraction - The spirit of any kind of OCR setup
is the development of feature vector which one is utilized in
identification phase. The exact same is true for English
language OCR system. This stage is created to acquire the
attributes from segmented spaces of image containing
characters to be identified, specifically attributes that serve to
differentiate an area related to a character from an area
related to other characters. The feature extraction could be
thus regarded as finding a group of parameters or attributes
that determine the shape of origin character as exactly and
uniquely as feasible.
2) Paper Cheque Digitalization
After the extraction of required fields of the cheque using
image processing, the fields should be validated. The area
which the handwritten signature is displayed will be cropped.
Other fields without the handwritten signature will be passed
to the CheckMate web application using a json object.
3) Prediction Algorithm
This involves predicting cheque user intentionality
towards a cheque rejection, based on interactions within a
commercial bank account. By keeping track of the cheque
clearing and rejection patterns of the cheque user, banking
system can have a better understanding of their behaviors.
The proposed solution will use a probabilistic generative
process to model cheque user transaction history, in which
the latent context variable is introduced to capture the
simultaneous influence from both time and current account
information. By identifying the past cheque clearing and
rejection patterns of the cheque user, the system can predict
the fields that should validate first to speed up the process.
The goal is to identify activity patterns of certain cheque
users that lead to cheque rejection and then extrapolate as
templates to predict high probability of cheque rejection of
user. The random Forest was used as the prediction model
for the approach.
The Random Forest is suitable for high dimensional data
demonstrating why it can deal with missing qualities and can
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deal with consistent, all out and binary data. The
bootstrapping and outfit conspire makes Random Forest
sufficiently able to conquer the issues of over fitting also,
thus there is no compelling reason to prune the trees. The
model interpretability and prediction precision gave by
Random Forest is extremely novel among well-known
machine learning techniques. Exact predictions and better
speculations are accomplished due to use of outfit
methodologies and random sampling. The gathering of data
in the Decision Tree depends on the estimations of qualities
of the given data. A Decision Tree is produced using the pre
classified data. The division into classes is settled on the
highlights that best partitions the data. The data things are
part as indicated by the estimations of these highlights. This
cycle is applied to each part subset of the data things
recursively. The cycle ends concerning as all the data things
in current subset have a place with a similar class.
C. Paper Cheque Fraud Detection Mechanism
This exploration has looked to recognize trustworthy
image processing highlights from examined bank cheques
that could help decide if they are veritable. Two highlights
will be considered: (i)MICR; and (ii) Handwritten
Signature. Predefined edges were made for cheque, so the
necessary highlights could be removed in a helpful way. The
workflow involves two equal blocks. The first block is
extracting the symbols and read accounting and routing
numbers of MICR field, and second block provides an
algorithmic solution for offline handwritten signature
verification using Pixel based Method. If both blocks
verified, then the cheque can be processed, else the if one or
both blocks were failed to verify, a notification will be sent
to the user as well as the bank to further investigations.
Further investigations will be handled by the bank itself
without any involvement with the approach.
1) MICR Field Verification
Magnetic Ink Character Recognition (MICR)) is a
monetary industry innovation for handling records. The
MICR encoding, called the MICR line, is at the foot of a
cheque and ordinarily incorporates the document-type
pointer, bank account number, bank code, cheque sum,
cheque number, and a control indicator.
i. Extraction of MICR text from the image – This
done during the image processing phase in
Section B.
ii. Scale the image to 200 dpi - The raise pictures are
prepared within the same but that a determination
scaling is decided from the comes about of
handling the front picture, as there is no MICR
data to prepare on the back. The result is a picture
trade compliant TIFF picture.
iii. After extraction of MICR line, will be finding the
first black pixel and last to crop out the MICR
region and cropping it out from the original image
Which gives the only the image containing MICR
code.
iv. Checks for vertical white spaces in case those
spaces are more than a certain edge esteem it
crops the center MICR code utilizing these white
spaces to provide which contains as it were the
MICR code required.
 v. Utilizing the extricated MICR Number and including worldwide and lattice include global
applying associated component examination and grid features.
employing an edge esteem for number of pixels i. Global Features - Global features provide
within the associated components so that able to information about the entire structure of the
confine be dispensing with all those dabs, human signature. The proposed set of global features
made blunders and undesirable characters and by[8] is extracted from the skeletonized
gives as it were the nine digits. signature in this study; Sig-nature Height,
vi. The extricated pictures are at that point resized to Height-to-Width Ratio, Pure Width, Pure
a settled columns and columns and after that Height, Image Area, Maximum Horizontal
utilized for comparing with the format digit Projection and Maximum Vertical Projection.
pictures appeared utilizing 2-dimensional
ii. Grid Features - As explained in[9] grid
relationship coefficient(r) equation (2) of the
segmentation is a technique used for signature
layout and the edited picture networks. The r detail analysis. A virtual grid of 12 x 8
stands for the correlating factor. segments is superimposed on the skeleton
ሺ஺೘೙ ି஺ሻሺ஻೘೙ ି஻ሻ
‫ ݎ‬ൌ  σ ݉ σ ݊ (2) image and the following features are
ሺσσ஺௠௡ି஺ҧ௡௠ሻଶሺσσ஻௠௡ି஻ҧ௡௠ሻଶ
calculated for each segment. The
accompanied features used for the system are
2) Handwritten Signature Verification
Pixels Density, Pixels Distribution and
This is done by limiting the entire signature and per-
Predominant Axial Slant.
forming the pixel comparison. The signature is captured by
the rear camera of the mobile device/phone. There will Algorithm - Fig. 4 shows the flow diagram of the
consistently be slight varieties in an individual's manually algorithm for implementation of the approach. Each
written signature, however the consistency made by common customer shall have their sample signatures recorded and
movement and practice after some time makes an stored in the database. The extraction of a signature from a
unmistakable example of biometric recognizable proof bank cheque is a difficult task [7] at the cheque backgrounds
strides to get a decent quality picture. The camera digitalized are complex in nature. The algorithm has been implemented
the signature with 400 dpi resolution and the pictures are using MATLAB tool.
stored in Joint Photographic Group (raster format). The
philosophy of this examination includes data preprocessing,
feature extraction and signature comparison algorithm.
1. Data Preprocessing - The pre-processing stage
follows the four steps proposed in: data area
cropping, width normalization, skeletonization
and binarization. Noise reduction is not
required since the signatures are acquired on
white sheets.
i. Data Area Cropping - Initially, the original
24bit color image is segmented from the
background to remove the white space
surrounding the signature using the
segmentation method of vertical and
horizontal projections.
ii. Width Normalization - The cropped image is
scaled using bicubic interpolation to a
constant width, keeping the aspect ratio fixed.
iii. Binarization - The 24-bit color signature is
converted to grayscale and then finalized
using a histogram-based binarization.
iv. Skeletonization - The algorithm proposed by
is used in order to reduce data storage without Fig. 4. Algorithm Process Flow for implementation
losing the structural information of the image
as well as to facilitate the extraction of D. Digital Cheque Issuing and Clearing Process
morphological features from digitized
Based on the gathered requirements, design approach
patterns.
clearly states all the architectural modules of the product
2. Feature Extraction and Selection - The along with its communication and data flow representation
selection of highlights is basic in optical with the external and third-party modules[10]. Fig. 5 shows
acknowledgment frameworks. The chose the process representation of digital cheque issuing and
highlights must be reasonable for use of the clearing process based on blockchain.
applied classifier. Highlight extraction is 1) Development of Smart Contract
separated into 2 arrangements of highlights Smart contract is written in Solidity language and
deployed in a test network. Since all the codes that write in

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the smart contracts are immutable, it is not allowed to update
or modify any of the code once the smart contract is
deployed. Remix online IDE which provides test account
address was used to code, compile and test the smart contract
Fig. 5. Process Flow Diagram of Digital Cheque Issuing and Clearing
System
2) Development of Web Application
To handle the cheque issuing and clearing processes,
CheckMate solution have a client-side block chain related
web application for the bank side. CheckMate web
application contains the main function like digital cheque
issuing process, digital cheque clearing process and paper
cheque clearing process. Additionally, the CheckMate web
application should be able to interact with the block chain
platform. Therefore, it is not just a traditional web
application. It is a Decentralized Applications which enables
to communicate with the blockchain. The basic logic of the
decentralized ap-plication is the smart contract. The interface
of the decentralized CheckMate applications does not look
any different than any existing web application. Client-side
web application which contains HTML, CSS, and JavaScript
files is communicated via a web browser. Block chain related
web application directory communicate with the block chain
instead of communicating with the back-end web
server[11].In order to interact CheckMate web application
with the blockchain, it was connected to the blockchain
network through the personal account using an Ethereum
wallet[11].
ReactJs web framework was used to develop the ap-
plication. Installed npm package to create a the React app.
Web3 Js library collection was used to deploy the smart
contract and access the MetaMask wallet. Then the
contracted was deployed in to the multimode Ethereum
network.
i. Cheque Issuing Request - Cheque issuing
request which send via the mobile app was
connected to the CheckMate web application
via a RESTful API.
ii. Validation of the request -The received
request was vali-dated through the
CheckMate web application by checking the
account balance of the user.
iii. Issue Digital Cheque - If the request is
validated as a valid one, then the cheque will
issue to the payee. A notification will send to
the both the cheque issuer and the payee.
iv. Cheque clearing process - Cheque clearing
process was developed based one the smart
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contract with use of the error prediction
algorithm’s results.
v. Dashboard - Dashboard was developed to
illustrate the summary of the issued and
cleared cheque per day from the bank branch.
vi. Create a digital cheque template - There can
be a customer requirement to get a printout of
the digital cheque. Hence a digital cheque
template was created with digital cheque
details.
After the implementation was done, the implement-ed
system was deployed in the testing environment to verify that
the product reaches the quality standards and achieve the
objectives by addressing the research problem. This phase
led to improve the quality of the product. It tries to identify
the defects in the system in all stages. All identified defects
are returned to development phase for fixing[12].
i. All the components are tested and make sure
all the com-ponents are working fine.
(Component testing)
ii. Entire system is tested to make sure that
system is acting as mentioned in the
requirement. (Requirement testing)
iii. Present complete system to a business team
where they test the system in business
perspective. (Acceptance testing)
After the implementation and compilation of the smart
contact, it is required to make sure the compiled smart
contract is running well without any defect.
3) Automate the testing and deploy the smart contract in
a real network.
An online IDE is not sufficient when developing a real
application. Truffle framework was used to develop the
smart contract, test in local environment and for the
deployment. The local test network was set up with Ganache
which provides 10 sample test account with 100 ETH for
each.
E. Cheque Transaction Securing Process
1) One Time Password (OTP) Generation Algorithm
The process of gaining verification and OTP generation
will be discussed in this phase. When a user tries to issue a
digital cheque after one factor verification following steps
will be done, This OTP generation algorithm will
automatically generate an OTP, and it will be sent to the user
via a SMS. The mobile application will prompt a message to
enter the OTP. If the entered OTP is correct, the cheque will
be issued else the cheque will not be issued. This algorithm
is based on cheque number, current date, and current time.
Cheque number is an element of digital cheque which
contains six digits. Cheque numbers are unique and issued by
the relevant bank and is embedded in between special
characters. Here, with-out those special characters, the
cheque number will be retrieved. After retrieving both
cheque number and current date, time, the hash value of
cheque number will be generated. This value will be
converted into a string format. This string format will be
concatenated with date, time string. Lastly, the resulted value
will be passed through a hash function and a hash value will
be generated. The outcome of the above algorithm will be the
OTP. The value of this OTP has a fixed length hence, this
was generated using a hash function. After OTP generation
OTP will be send to the user as an SMS. To do that, twilio.io
API will be used. Using this API generated OTP can be
sends to the user. In mobile application there will be a
prompt message asking for OTP.
V. RESULTS AND DISCUSSION
The progresses in computer and data innovation permit
banks to create programmed acknowledgment and
verification frameworks. Within the investigate and
improvement of such a framework, an enormous cheque-
image database, which contains hundreds of cheque pictures,
is as a rule utilized for preparing or testing. Although the
color picture of a cheque contains wealthier data than that of
its grey-scale picture, it will devour more memory to handle
a color cheque and more space to store it. Since cheques by
their very nature contain sensitive information, it is often
hard to find a dataset that is not only representative of real-
world bank cheque images but is also cheap/easy to license.
Many of these datasets belong to the banks themselves,
making it hard for developers to work with them.
There is no fixed arrange for cheques indeed in a nation
itself. Each bank has its claim standard; so, the cheques of
distinctive banks vary not as it were in foundation, but too in
sort and position of the machine printed and manually
written data. The region of intrigued ought to be found first
in those systems, which do not depend on specific cheque
groups. Area looking is difficult for cheques with destitute
check quality.
A. Paper cheque clearing process and Error Prediction
Algorithm
Probably the greatest preferred position of random forest
is its adaptability. Random forest is likewise a convenient
algorithm on the grounds that the default hyperparameters it
utilizes regularly produce a decent expectation result.
Understanding the hyperparameters is clear, and there is
likewise not that a considerable lot of them. Probably the
most serious issue in AI is overfitting, yet often this will not
occur on account of the random forest classifier. On the off
chance that there are sufficient trees in the forest, the
classifier will not overfit the model. The principal
impediment of random forest is that an enormous number of
trees can make the algorithm excessively moderate and
incapable for constant forecasts. By and large, these
algorithms are quick to prepare, yet very delayed to make
forecasts once they are prepared. A more accurate
expectation requires more trees, which brings about a slower
model. Since OCR is used for image processing there are
few drawbacks of it. OCR text works well with printed text
only and not with handwritten text. Handwriting needs to be
learnt by the computer.
1) Testing of Identifying Payee Name, Amount in words,
Amount in numbers and Date.
The expected time for identifying Payee Name, Amount
in words, Amount in numbers and Date was 2 seconds, but it
took about 3.5 seconds. Since we are using python open CV
to identify text, some letters are identified more than once
when we process lite color printed cheques. We use another
python script to improve the accuracy of text detection and it
takes up to 4 seconds to complete the task.
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The python script achieves the results in expected time,
but some delimiters were note identify properly and we train
our model with a large dataset to overcome the problem.
B. Paper Cheque Fraud Detection Process
One of the most difficulties in creating a successful
cheque perusing framework is the tall degree of variability
and vulnerability within the manually written signature.
Signature scan has a few qualities. Since of the huge sum of
information show in a signature check layout, as well as the
trouble in mirroring the behavior of marking, signature scan-
technology is exceedingly safe to faker endeavors.
In any case, signature-scan has a few shortcomings.
Signature-scan is created to validate subjects based on the
characteristics of their distinctive signature. As an outcome,
individuals who do not sign his or her names in a steady
manner series of signatures those are equivalent enough that
the system can locate a large percentage of the typical
characteristics between the enrollment signatures. During
affirmation, enough characteristics need to remain constant
to decide with confidence that the authorized user signed. As
a result, individuals with muscular conditions and people
who often sign with only their initials may possibly result in
a greater False Rejection Rate (FRR), which calculates the
probability that a system will improperly reject an authorized
user.
Template matching technique is not the most trustworthy
technique for MICR character recognition, specifically for
real-world pictures that are most likely to be a lot noisier and
difficult to separate. OCR’ing a bank cheque is a lot more
difficult than OCR’ing a credit card — this is generally
because of to the fact that bank cheque symbols include of
multiple parts. Nevertheless, while the template matching
technique worked properly on the testing image, real-world
inputs are most likely to be a lot noisier, creating it harder to
remove the digits and symbols utilizing simple contour
strategies.
1) Testing of MICR Field data and Handwritten
signature verification.
Identification of the MICR field components which is in
E-32 font. The 9 numbers in E-32 format were identified
successfully. From the four delimiters presented in the
MICR, three were Successfully identified and the Bank
branch delimiter was not successfully recognized.
If the pixel match is more than 70%, the signature is
taken as a legitimate signature.
C. Digital Cheque Issuing and Clearing Process
Most blockchains are planned as a decentralized database
that capacities as a dispersed advanced record. The
Verification of Work agreement calculation that secures the
Bitcoin blockchain has demonstrated to be exceptionally
effective over a long time. Be that as it may, there are a
couple of potential assaults that can be performed against
blockchain networks and 51% assaults are among the
foremost talked about. Such an assault may happen in case
one substance oversees to control more than 50% of the
arrange hashing control, which would inevitably permit them
to disturb the arrange by intentioned barring or altering the
requesting of transactions.
Blockchain may be a arrange that depends on hubs to
operate appropriately. The quality of the hubs decides the
quality of the blockchain. For example, Bitcoin’s blockchain
is solid and incentivizes the hubs to take an interest within
the organize. Be that as it may, the same cannot be true for a
blockchain organize that does not incentivize the nodes. This
implies that it isn't a conveyed computing framework where
the arrange doesn’t depend on the association and support of
the hubs. In comparison, a disseminated computing
framework works to guarantee that they confirm the
exchanges agreeing to the rules, guarantee that they record
the exchanges, conjointly make sure that they have the value-
based history for each exchange. Each of these activities is
comparable to that of blockchain, but there is a need of
cooperative energy, shared help, and paralleling for each one
of them. Clearly, blockchain might be a distributed network,
but it lacks the features that make a distributed computing
system so beneficial for the corporations.
1) Testing of Issuing and clearing digital cheques using
blockchain.
Create a private blockchain using Ethereum, and then add
a digital cheque. Test the system several times to find the
accuracy. During the cheque clearance, test the system
whether the web application can access the blockchain.
Smart Contract transaction accuracy was 75%.
VI. CONCLUSION
The outcomes of the research project include block
chain-based cheque issuing and clearing process. It will help
to improve the functionalities of the cheque as well as
improve and speed up the automation process. Furthermore,
the digital cheques will reduce the costs combined with the
paper cheque. Since this research component is based on
blockchain based smart contact, the security of the cheque
truncation system will be increased. Moreover, digital
cheque will reduce the wastage of the paper and labor cost by
replacing the paper cheque.
The proposed system has certain restrictions. The
approach only analyzes the scope of three types of cheques;
order cheques, cash cheques and dated cheques when
clearing. CheckMate Mobile and web applications only
supports English language for the moment. Ethereum which
is a publicly available blockchain may lead for certain
privacy and slowness issues than private or a federated
blockchain. The principal restraint is that the methods must
conform to specific bank cheque layouts, including color
schemes from various banks including private and public
banks. Other limitations that will be addressed in future
research on the approach include the handling of defective
and damaged cheques, background artwork and signatures
written in multicolored ink.
This research’s principal goal is to make financial
transactions more efficient, convenient and secure through
digital cheque by speeding up the clearing process,
increasing the credibility and security of cheque, improving
the digitalizing process, increase the integrity and reducing
the frauds. This system is an interesting field of research
from both scientific and commercial points of view as it
provides additional in-sights so a company can rely on the
accuracy, reliability, and integrity of its data and transactions
to make quick and secure decisions. This proposed system is
profoundly dependable, giving precise recognition which
guarantees that the users are safely ensured against cheque
fraud. In today’s commercial center, where fundamental
versatile keeping money usefulness is rapidly getting to be
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table stakes, CheckMate speaks to an opportunity for banks
to extend pertinence with their clients, improve engagement
and communication, and remain at the driving edge of the
versatile application. Finally, compared to existing systems,
the proposed approach- CheckMate system is prominent
form the existing systems, as it provides the unique features:
x Support both paper cheques and digital cheques
together.
x Use digital cheque which based on block chain
platform.
x Enable digital cheque clearance process on block
chain platform.
x Use of a mobile application for cheque transactions.
x Use of a mobile application for fraud detection on
paper cheques.
REFERENCES
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AUTHOR CONTRIBUTION
All the authors brainstormed ideas and conceived of the
presented idea. Bogahawatte W.W.M.K.A and Isuri
Samanmali A.H.L verified the analytical methods.
Bogahawatte W.W.M.K.A, Isuri Samanmali A.H.L, Perera
K.D.M and Kavindi M.A.T developed the theory and
performed the computations. Bogahawatte W.W.M.K.A,
Isuri Samanmali A.H.L, Perera K.D.M and Kavindi M.A.T
designed the model and the computational framework and
analysed the data. Bogahawatte W.W.M.K.A, Isuri
Samanmali A.H.L, Perera K.D.M and Kavindi M.A.T carried
out the implementation. W.W.M.K.A and Isuri Samanmali
A.H.L discussed the results and contributed to the final
manuscript. Mr. Amila Nuwan Senaratne directed and
supervised throughout the entire system implementation as
well as to the for the analysis of the results and to the writing
of the manuscript. Dr. Lakmal Rupasinghe contributed to the
design and implementation of the research

Bogahawatte W.W.M.K.A is a
Cyber Security undergraduate
at Sri Lanka Institute of
Information Technology,
Technology, Malabe.

Isuri Samanmali A.H.L is a Cyber

Security undergraduate at Sri
Lanka Institute of Information
Technology, Malabe

Perera K.D.M is a Cyber

Security undergraduate at Sri
Lanka Institute of Information
Technology, Malabe.

Kavindi M.A.T is a
Cyber Security undergraduate
at Sri Lanka Institute of
Information Technology,
Malabe

Mr. Amila Nuwan Senaratne is a Senior

Lecturer at Sri Lanka Institute of
Information Technology, Malabe.

Dr. Lakmal Rupasinghe is a Senior

Lecturer at Sri Lanka Institute of
Information Technology, Malabe.

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