A cancelled cheque is a cheque leaf on which a person has drawn two lines and written the word ‘cancelled’ on it in between those lines. A bank never pays a cancelled cheque as it carries no monetary value at all. A cancelled cheque is used to prove that you are the account holder of the cheque being issued. You also don’t need to sign a cancelled cheque.
Many banks and other financial institutions want a cancelled cheque
while processing many of your requests for services such as loans, bank account opening and more. It is used as a key document for undergoing Know Your Customer (KYC) formalities.
They use the information that is contained in a cancelled cheque to verify your bank details. A cancelled cheque has following information such as:
- Your name
- Your account number
- Cheque number
- IFSC Code of the bank branch
- MICR Code of the bank branch
- Name of the issuing bank and branch
If you are looking to apply for loans, open a new bank account, buy products on EMIs, then your service provider may ask you to give a cancelled cheque. You don’t need to worry about it being misused as it’s cancelled and is only for verifying your bank details.
Thus, the next time when any of the service providers in India ask to present a cancelled cheque for availing their services, then you can cancel a cheque and give.
We hope that this answer was able to solve your query!