A financial instrument used to verify whether a user has an account with a specific bank or institution is a Cancel cheque. In essence, the account holder invalidates a cheque that has been canceled. One of the most common banking services in India is the use of Cheques. They can be used by people who live in both urban and rural areas because they are simple to understand. Additionally, in addition to serving as a means of transaction, Cheques can also be used as evidence of ownership. A type of cancelled Cheques can also be used to open a bank account and apply for a loan.
Cancelled Cheque
In financial transactions, the term “Cancel cheque” may appear to be difficult to understand, but it is crucial. Do you know how to void a cheque when necessary or write a cancelled cheque for specific purposes? You will have a clear understanding of what cancelled cheque are after reading this comprehensive guide. From correctly canceling them to unlocking their essential applications, we’ll talk about it all. Come learn the concept with us so you can confidently write, use, and cancel cheque when necessary.
Also Check:-
About Cancelled Cheque
The account holder marks a Cancelled Cheque with diagonal lines to make it ineligible for transactions and writes the word “Cancel” in parallel lines on it. This distinctive marking indicates that the cheque cannot be used for any financial transactions, such as payments or withdrawals. These cheques are susceptible to cybercrime because, despite being Cancel, they retain sensitive information like the account holder’s name, bank account number, amount, cheque number, and IFSC code, among other things. As a result, it is absolutely necessary to promptly dispose of cancelled Cheque after declaring them null and void.
Cancelled Cheque Denote
Money cannot be withdrawn or sent with a cancelled cheque. It contains your banking information, which some banks and other businesses might use to cheque that your information is accurate. Lenders, investment brokers, and other organizations use the MICR code, your bank account number, and the IFSC code of your home branch to verify your banking information on the cancelled check. Therefore, it is not incorrect to assert that a cancelled certificate also acts as your banking bonafide certificate. KYC verification, insurance claims, EPF withdrawals, and loan disbursements all require a cancelled cheque.
Also Check:-
Step to Write a Cancelled Cheque
Writing a cancelled chequeis simple. Because it doesn’t call for a lot of information, anyone with a pen can write one. If you want to write a cancelled cheque, remember these tips:
- Take a new cheque.
- The name, amount, or signature of the Payee should not be written on the cheque.
- Draw two lines that are parallel across the check.
- In capital letters, write “CANCELLED” between the two parallel lines.
- The account number, IFSC code, MICR code, account holder’s name, bank’s name, or location should not be obscured by the parallel lines.
Risk Associated with A Cancelled Cheque
People are concerned about the misuse of the cancelled cheque and fraudulent withdrawals. However, due to their legal cancelled, no such transaction can take place, so you need not be concerned. But follow the rules when you cheque your check.
- When canceling your cheque , always use a blue or black ink pen because banks may reject your cheque in other situations. The Cancel check does not require a signature.
- It is only used to cheque your banking information and other similar things. Therefore, there is no need for a signature. After drawing parallel lines on the cheque, make sure to write “Cancelled” on each line.
- It’s possible to forget to mark the word when things get tough. It won’t be considered a Cancel cheque by banks and may be rejected.
A cancelled cheque can still be used for fraud, but no one can take money out with it. Always hand over a Cancel cheque to an authoritative figure and never sign it. Your bank account number, MICR code, IFSC code, bank name, account holder’s name, and other details remain on a cancelled cheque.</p>
Also Check:-
Final Words
Sharing crucial information about a bank account can still be done safely using a Cancel cheque. For automated systems, Know Your Customer (KYC) verification, and various banking tasks, these details are essential. Banks are able to quickly and accurately identify their customers by relying on this data. However, it is essential to handle a cancelled cheque with caution to prevent fraud due to the sensitive nature of the information it reveals. A cancelled cheque can be a useful tool for making banking more secure when used responsibly.