Cancelled Cheque Rule: Why do banks demand cancelled cheques even in the digital age, know the reason..

Even today, banks or insurance companies demand a canceled cheque from their customers. Many companies demand a canceled cheque from their employees at the time of a new job. In such a situation, the question is why is a canceled cheque needed? All the information related to your account is also written on the canceled cheque. We all know that all banking work is being done online.

So now there is less need to go to the bank. But even amidst all the changes due to digital, the tradition of canceled cheque (CANCELLED CHEQUE) remains intact. Even today, banks or insurance companies demand a canceled cheque from their customers. Many companies demand a canceled cheque from their employees at the time of a new job. In such a situation, the question is why is a canceled cheque needed?

Why is a canceled cheque needed?
When you give a canceled cheque to someone, there is no need to sign it. You just have to write cancel on the cheque. This much work is enough. Apart from this, you can also make a cross mark on the cheque. Companies or banks take cancelled cheques to verify the accounts of customers.

This information is present on the cheque:
Generally giving a cancelled cheque means that you have an account in that bank. Your name may or may not be on the cheque. Because your bank account number is written on the cheque. Also, the IFSC code of your branch is written on the cheque. With this, companies or banks verify your account. Because all the details related to your account are written on the cancelled cheque. Therefore, it should not be given to anyone.

Can money be withdrawn from a cancelled cheque?
No one can withdraw money from your account through a cancelled cheque. It is used only to verify your account. When a cancelled cheque is given to anyone, Cancelled is written in the middle. So that no one can misuse the cheque.

Why is it needed?
When you do financial work, a cancelled cheque is required. When you go to take a car loan, home loan, or personal loan, the bank asks for a cancelled cheque. If you withdraw money online from the Provident Fund, a cancelled cheque is required. Even while investing in mutual funds, companies ask for cancelled cheques.

For your information, let us tell you that for CANCELLED CHEQUE, always use a pen with black ink or blue ink. The ink of any other color should not be used for cancelled cheques.

When is a cancelled cheque required:-

To get a loan from the bank.

To withdraw EPF money.

To open a demat account.

To get KYC done in the bank.

To buy insurance.

To pay EMI.

To invest in mutual funds.

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