Cheque Rules: Cheques have been used for money transactions for years. Cheques are also used in many ways. One such way is to sign on the back of the cheque. You must have often seen that some people sign on the back of the cheque and many people do not sign on the back of the cheque. So is it necessary to sign on the back of the cheque in any particular situation or do people not sign on the back of the cheque just like that? Let us know.
This happens in bearer cheque
If your cheque is a bearer cheque, then it is necessary to sign on the back of it. This is because many times no one’s name is written on such cheques. In such a case, a problem can arise that the person who has brought the cheque may have found it lying somewhere. In such a case, to protect themselves, the bank gets the signature of the person who has brought the cheque on the back of the cheque. This ensures that the money withdrawn from the cheque has been given to the person who has brought the cheque and if that cheque has been encashed by an unknown person, then the bank has no role in it.
When do you have to sign despite your name being written?
Bearer cheque means that any person who reaches the bank with that cheque can withdraw money through it. That is, even if someone’s name is written on the cheque, another person can still withdraw money from that cheque. So, to avoid any fraud, banks get the person who reaches the bank with the cheque to sign on the back of the cheque.
When do banks ask for address proof?
There are some cases in which the bank asks for the address proof of the person who comes with a bearer cheque. This happens especially when the amount of the cheque is big. In such a case, the bank takes the address proof of the person who comes with the bearer cheque so that if any fraud arises in the future, that person can be contacted or action can be taken against him.
When is a signature not required?
In case of an order cheque, a signature is not required on the back of the cheque. In an order cheque, money is given only to the person whose name is written on it. It is also written on this cheque that it is an order cheque and not a bearer cheque. It is necessary for that person to be present in the bank while encashing this cheque. This is the reason why a signature is not required on an order cheque. However, before giving money on an order cheque, the bank employees themselves do a thorough investigation and give the money only after being satisfied. In this, it is necessary to ensure whether the name written on the cheque is of the person who has brought the cheque or of someone else.
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