Children like to fly kites, toys that soar through the sky courtesy of their light frame and the thin material stretched over it.

Bankers, conversely, do not like it when their depositors fly check kites. As a matter of fact, check kiting, the practice of utilizing the time it takes for a check to clear as a form of interest-free credit, is illegal.

Before the introduction of electronic transfers in banking operations, checks were physically moved among banks. In effect, checks could take one day to clear among banks located in the same town, or many more days among distant banks. Time then was the pivotal element of a check-kiting scheme.

Sharp bookkeepers, posting account ledgers, could spot a kite in progress, but, more often than not, the bookkeepers were not so sharp, or in too much of a hurry to give the ledgers a second look after posting checks and deposits.

A bank supplied their tellers with a big rubber stamp to mark an impression on the deposit slips. The imprint provided a series of successive lines next to the number of days funds deposited remained uncollected and not available.

The tellers looked at the checks deposited and eyeballed the amounts to be delayed. The bookkeepers then noted that information on the ledgers.

From here, the process usually differed from bank to bank.

I can recall one major New York bank that sent its auditors to the Return Items Department every quarter for a period of two weeks. The auditors reported for work very early in the morning to get a timely start when a messenger delivered the return items picked up at the Federal Reserve.

The items were distributed among the auditors, who proceeded to make lists containing complete information: the name of the depositor and its branch, the drawer, the drawee bank and its ABA routing number, the date and amount and the reason for the return, usually NSF (insufficient funds).

The items were then relinquished to the department for distribution to the branches. The auditors then went to work by selecting the larger items first and calling the bookkeepers of the branches where the items had been deposited and were being returned.

The auditors asked the bookkeepers if the account where the item was being returned had a sufficient collected balance to cover the item. If not, that was a red flag.

The auditors may also ask the bookkeepers to take a look at the ledger and see if the daily deposits were smaller or larger than the corresponding daily balances. Larger deposits were also a red flag.

If the situation involved a significant sum of money, the auditor went directly to the branch to analyze the account. Previous account statements were analyzed together with the deposit slips, on which the ABA numbers were noted next to each deposited check.

If it was determined that checks were being paid against uncollected funds, those checks were reversed, returned and marked accordingly. If it was determined instead that a downright kiting operation was going on, then as soon as it was safe, the account was closed.

The auditor, out of professional courtesy, called the banks to which the checks were being returned and advised them so that they too could protect themselves.

Those were the main means by which the banks shot down check kites.

Over his 50-year career in banking, Ugo Nardi worked his way up from a teller to an auditor, lending officer, state bank examiner and a bank president. He retired in 2000.