A Cancelled Cheque is a cheque leaf that is crossed with two parallel lines and a term “Cancelled” written in between those lines. As the name suggests that the purpose of the Cancelled Cheque is to provide the user with KYC Documents which tells that you have a bank account with you.
How to Issue a Cancelled Cheque?
It is very simple to issue a cancelled cheque. This can be done by Drawing two parallel lines and writing the term “Cancelled” in between those lines. You do not have to mention any other details or Sign it. It is necessary to follow that in a cancelled cheque, you need to write Cancelled Cheque only and nothing else.
What Information does a Cancelled Cheque Contains?
A Cancelled Cheque contains various details which tell us about the details that a KYC document must contain. The following are the details that a cancelled cheque contains
- Account Holder’s name
- Bank account number
- IFSC
- MICR
- Name of the bank and branch details
Use of Cancelled Cheque
Cancelled Cheque is used on various financial areas where the KYC is required with your bank account. The following are the list of bank uses of the Cancelled Cheque
- It is used to setting up ECS (Electronic Clearance Service) that automatically deducts the amount on monthly bases
- For buying the insurance policy, a cancelled cheque is asked by the Insurance agent while availing the policy.
- For loans and other credit facilities like EMI scheme, a cancelled cheque is required
- To withdraw the PF, companies generally ask for a cancelled cheque with your name on it to validate your account details.
- Most of the investment firms will ask for a cancelled cheque so that it can be verified that the account belongs to you.
- A Demat account can also ask for the cancelled cheque when you want to invest in the stock as a KYC Document.
FAQ on Cancelled Cheque
Ans. No, you do not have to mention a date on the cheque
Ans. A cancelled cheque cannot be used to debit money from your account.
Ans. Never sign a cancelled cheque
Ans. Yes, you can use the same cancelled cheque multiple times.
Ans. No, cancelled cheque cannot be used for any kind of transactions.
Ans. A cancelled cheque can not be used in bank for transaction purpose but before giving someone the cancelled cheque, make sure that cheque is cancelled properly and could not be overwritten.
