What is a Cancelled Cheque?
A cancelled cheque is a standard cheque that crossed two lines and with the word “CANCELLED” written between those lines. Individual can cancel a cheque when they make any mistake like misspelling, wrong information, or want to offer it as a KYC, etc.
A cheque can simply be cancelled by stating the word “CANCELLED” on it. It is usually cancelled so that the cheque is not misused in any way by anybody.
Individual may also show a cancelled cheque as proof that they have a bank account. Even though a crossed cheque can’t be cash, but a cancelled cheque leaf can provide their account information such as account number, their name, MICR code, bank name, and bank branch.
How to Write Cancelled Cheque?
When cancelling a cheque individual need to be careful otherwise can be abused. Here are the steps to write a cancelled cheque:
Step 1: Take a fresh cheque from cheque leaf that individual wish to cancel. Do not sign anywhere on the cheque.
Step 2: Draw two parallel cross lines across the cheque.
Step 3: Write “CANCELLED” between those two lines in capital letters.
Make sure the parallel lines individual draw over the cheque leaf does not cover any important details such as the account number, the name of the account holder, IFSC code, MIRC code, name and branch address of the bank in which the account exists, etc.
In case, if individual already have made a mistake while writing a cheque they can still cancel it by following from Step 2. Even though no one can withdraw money from crossed cheque but still there are fraudsters who can misuse the cheque. This is why it is important when individual give someone a cancelled cheque don’t put a sign on it.
How to Use A Cancelled Cheque?
However, a cancelled cheque cannot be used to withdraw money, but there are numerous occasions where having a cancelled cheque can be beneficial. Some of them are:
Know Your Customer (KYC) – Cancelled cheques can be used to verifying the KYC when individual are planning to invest in mutual funds or the stock market. A cheque has vital information on it like the name and account number of the account holder and the name and branch address of the bank in which the individual holds an account.
Equated Monthly Installments (EMI) – EMI full form is equated monthly installment, which is the monthly amount payments individual make towards a loan that individual opt for. It could be car loan, business loan, MSME loan or personal loan. Banks might ask individual for a cancelled cheque to fulfil the formalities for their EMI.
Demat Account – A cancelled cheque leaf along with other KYC documents essential to be submitted to the stock brokerage when individual are open a Demat account.
Electronic Clearance Services (ECS) – ECS is an electronic mode of payment where a specific amount will be transferred from one bank to another. When individual set up an ECS from their account, individual essential to submit a cancelled cheque to complete the process.
Withdrawal of Employee Provident Fund (EPF) –individual need to submit a cancelled cheque for verification when they withdraw fund from their EPF account.
Opening A Bank Account – When opening a bank account, a cancelled cheque needs to submit for the process completion.
Insurance Policies – Some organizations might ask individual for a blank cancelled cheque when they are opening an insurance policy.
Cancelled Cheque Example
A cancelled cheque comprises the same elements as a standard cheque. There are:
• Name of the bank
• Name of the branch
• Name of the account holder
• Account number
• IFSC code
• MICR
When individual see the cancelled cheque images, the difference will be noticeable. Also, the word ‘CANCELLED’ will be written across the cheque between two parallel lines.
So as we all know form the above points that a cheque can simply be cancelled by stating the word “CANCELLED” on it. It is usually cancelled so that the cheque is not misused in any way by anybody. And a cancelled cheque is a standard cheque that crossed two lines and with the word “CANCELLED” written between those lines. Most of times the company used a cancelled cheque method to ensure that no one can access your account in a fraudulent way. A cancelled cheque still contains information such as your bank account number, account holder’s name, IFSC code, MICR code, name of the bank, etc. so it is very appropriate for those who start new business on their own but along with these they have to provide project report so that they can get bank loan for their business but as we all know for providing project report they have at least knowledge about how to make an project report, what is project report, what is CMA data, etc. now along with project report they can get subsidy project report and subsidy DPR or they even get Sample project report for Subsidy and for that first of all they need to know How to Prepare Project report for Subsidy or Business Project Report for Subsidy. Or they can download CMA for free and can use CMA DIY tool, CMA online preparation tool etc. and with help of loanDPR.com they can get easily project report for their big project like Project Report for Industries, Project Report in entrepreneurship, Company Project Report, etc. or they can get Mudra Loan Project Report as well.
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