May I ask you that why you have raised this query if you have spent 2 years in the company? Seeking a cheque for any so amount may raise a question by you about its requirement then and there. Anyhow keeping anything like this and other personal documents is a breach of Bonded Labour System (Abolition) Act, 1976.
Any activity which restrain a worker/employee from withdrawing himself/herself form the work as per his/her wish has no statutory support. This is a breach of fundamental rights as well. Mostly in unorganized sector the practice of retaining personal documents, security cheques is prevailing with most of the reasoning behind is ensuring employee do not commit any fraud or do not leave absconding or breach and rule. Though the mentioned conditions have to be adoptive and practiced as code of conduct and can be a part of contract also but cannot be done with retaining the other's asset. Even though if your employer suppose tries to encash you cheque then legally he/she has to make an entry in the accounting system showing the nature of transaction which cannot be done as there is no exchange of good or service from the employer side has happen.
Your question of incentive is the matter of company policy which has not legal support for you. You may have been hired with some terms and condition of the employment descriptive on your appointment letter. Unless there is no as such incentive policy or structure has been communicated to you in written, then it doesn't have any legal viability.