You do not need to sign such a cheque.įirst, ten cheque leaves will be free of cost for cheque book services in a financial year. Such a cheque is often asked for when a person wishes to withdraw from an Employee's Provident Fund (EPF) funds, for Know Your Customer (KYC) purposes, and other reasons. This type of cheque validates your banking account with that specific bank. This has two parallel lines across it with the word 'cancelled'. You also have a cancelled cheque leaf among the various types of cheques. This could be a person, an institute, a business or even another bank. Every cheque leaf is an order you sign to the bank requesting it to make a specific payment amount available to the payee's name indicated on the cheque. Some are bearer, post-dated, order, crossed, open, traveller's, self and stale. These are very safe financial tools for making payments. Once you open an account with a bank, the bank provides you with a chequebook with several cheque leaves. A bank cheque leaf is also called a cheque. Thanks for taking out your time to read this blog.I hope you all must have gained some knowledge. Similarly, no revenue stamp is required to be affixed on cheques. There is, however, a custom among banks to mark cheques as ‘good’ for the purpose of clearance. It does not require acceptance and stamp: Unlike a bill of exchange, a cheque does not require acceptance on part of the drawee. Specific banker only : A cheque is always drawn only on a particular banker.Usually, the name & address of the banker is clearly printed on the cheque leaf itself. It may be drawn payable to bearer on demand unlike a bill or a pro-note.ĩ. It may be payable to the drawer himself: Cheques may be payable to the drawer himself/herself. In both cases, the validity of the cheque is presumed to commence from the date mentioned on it.Ĩ.
A post-dated or antedated cheque will not be invalid. Validity: A cheque is normally valid for six months from the date it bears. It is payable on demand: A cheque must be an order to pay a certain sum of money on demand but it is not necessary to the word ‘ on demand ‘ or equivalent words.ħ. It should be signed by the drawer and should be dated: A cheque does not carry any validity unless signed by the original drawer. If a cheque is drawn to do something in addition to, or other than to pay money, it cannot be a cheque.ĥ.
The check must have an order to pay a certain sum: The cheque should contain an order to pay a certain sum of money only. unconditional : A cheque is an order to pay and it is not a request. A cheque can be drawn on a bank where the drawer has an account, saving bank, or current.ģ. It should be drawn on banker: It is always drawn on a specified banker. An oral order to pay does not constitute a cheque.Ģ. Instrument in writing : A cheque must be in writing. If one takes a close look at the definition of a cheque, it becomes clear that a cheque has the following 10 essential elements or characteristicsġ. Definition: Cheque refers to a negotiable instrument that contains an unconditional order to the bank to pay a certain sum mentioned in the instrument, from the drawer’s account, to the person to whom it is issued, or to the order of the specified person or the bearer.
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