A cancelled cheque is one of the most commonly used financial documents in India. Despite its frequent use, many people are still unclear about its purpose, how to write one, and when it is required. In this comprehensive guide, we will cover everything you need to know about a cancelled cheque, its uses, how to create one, and frequently asked questions.
What is a Cancelled Cheque?
A cancelled cheque is a cheque that has been voided by drawing two parallel lines across it and writing the word “CANCELLED” between the lines. It ensures that the cheque cannot be used for any transaction but still provides essential bank details like:
- Account holder’s name (if printed)
- Account number
- Bank’s name and branch
- IFSC code
It’s an effective way to share banking information securely without the risk of misuse.
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What is a Cancelled Cheque Image?
A cancelled cheque image is simply a scanned or photographed copy of the cheque with the cancellation markings. It is often used in online processes where physical submission is not required.
How to Write and Strike a Cancelled Cheque
Creating a cancelled cheque is simple and requires no specialized knowledge. Follow these steps:
- Take a blank cheque from your cheque book.
- Draw two parallel lines diagonally across the cheque.
- Write the word “CANCELLED” clearly between the lines.
- Ensure you do not sign the cheque, as a cancelled cheque does not require a signature.
Does a Cancelled Cheque Require a Signature?
No, a cancelled cheque does not need to be signed. Adding a signature could pose a security risk as the cheque might be misused.
How to Fill Out a Cancelled Cheque?
You do not need to fill out any details on a cancelled cheque. The purpose of the cheque is only to share banking details.
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Why Do You Need a Cancelled Cheque?
A cancelled cheque is often required in various financial and non-financial processes, such as:
- KYC (Know Your Customer) Verification
Banks and financial institutions use it to verify your account details. - Setting Up ECS (Electronic Clearance System)
It is used to authorize auto-debit instructions for loans, bill payments, or investments. - Loan Applications
Banks often ask for a cancelled cheque when processing home, car, or personal loans. - Provident Fund (PF) Withdrawal
EPFO may ask for a cancelled cheque to validate your bank account for fund transfers. - Opening Investment Accounts
Mutual funds and demat accounts require cancelled cheques to link your bank account.
Is a Cancelled Cheque Required for NPS?
Yes, a cancelled cheque is required to open an NPS (National Pension System) account or make contributions. It helps verify your bank account details.
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How to Get a Cancelled Cheque?
Here are some easy ways to obtain a cancelled cheque:
- Take a blank cheque from your cheque book and cancel it manually.
- Request a bank to provide an official document with your account details if you do not have a cheque book.
- For SBI account holders, you can visit your branch and ask for alternatives if you don’t have a cheque book.
Can I Download a Cancelled Cheque?
No, you cannot download a cancelled cheque directly. However, many banks now provide online account details that can serve as alternatives to cancelled cheques.
What Happens if You Deposit a Cancelled Cheque?
A cancelled cheque cannot be processed for payments. If someone attempts to deposit a cancelled cheque, the bank will reject it as it is considered void.
How to Present a Cancelled Cheque?
When submitting a cancelled cheque, ensure:
- The word “CANCELLED” is clearly visible.
- The cheque is clean and not crumpled.
- Do not include any personal or sensitive information like a signature unless specifically requested.
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Examples and Alternatives to a Cancelled Cheque
What is an Example of a Cancelled Cheque?
An example of a cancelled cheque would be one that has two parallel lines drawn diagonally across it, with “CANCELLED” written clearly between them. No other details are filled in, and the cheque is unsigned.
Alternatives to a Cancelled Cheque
If you cannot provide a cancelled cheque, consider using:
- A bank passbook copy
- An account statement with bank’s stamp
- A letter from your bank confirming account details
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FAQs on Cancelled Cheques
1. What is a Cancelled Cheque?
A cancelled cheque is a cheque that is voided by marking it with the word “CANCELLED” to prevent misuse, but it retains important bank account details.
2. How Do I Get a Canceled Check?
You can create a cancelled cheque by taking a blank cheque, crossing it with two parallel lines, and writing “CANCELLED” across it.
3. What Happens if You Deposit a Cancelled Cheque?
The cheque will not be processed as it is void.
4. How to Strike a Cancelled Cheque?
Draw two parallel lines across the cheque and write “CANCELLED” between them.
5. How to Present a Cancelled Check?
Ensure the cheque is clean, legible, and properly cancelled. Do not sign it unless instructed.
6. Is a Cancelled Cheque Required for NPS?
Yes, it is needed for opening and verifying NPS accounts.
7. Can I Download a Cancelled Cheque?
No, but you can manually create one or request alternative documents from your bank.
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Conclusion:
Importance of Cancelled Cheques in Financial Transactions
A cancelled cheque is a simple yet essential document used in a variety of financial processes. By understanding how to create and use a cancelled cheque, you can streamline account verification, automate payments, and secure your financial transactions. Always handle cancelled cheques carefully to avoid any misuse or fraud.