Curated By: Business Desk
Last Updated: August 17, 2023, 12:46 IST
Every bank offers its account holders essential tools for financial transactions, including a passbook, ATM card, and cheque book. The latter holds significant importance as it facilitates major payments while maintaining a transaction record. A cheque acts as a bridge between individuals and their banking transactions, allowing payments to be made to individuals or organizations. To ensure the integrity of this process, there are several vital factors to consider while writing or signing a cheque.
1. Write “ONLY” After the Amount
When filling out a cheque, remember to write the word “ONLY” after the stated amount. This precautionary step is taken to prevent potential fraud, ensuring that no unauthorized alterations can be made to the cheque. Additionally, writing the amount in words at the end of the cheque followed by the word “ONLY” adds another layer of security.
2. Avoid Signing Blank Cheques
One cardinal rule to remember is never to sign a blank cheque. Ensure that you fill in the payee’s name, the specified amount, and the date before signing the cheque. Handing over a blank cheque exposes you to the risk of someone else altering the cheque and causing potential financial harm.
3. Precise Signature is Key
When signing a cheque, meticulousness is crucial. Even a minor error in the signature can lead to the cheque being rejected. Banks meticulously compare signatures for authenticity. Therefore, it is essential to ensure your signature is consistent and error-free when issuing a cheque.
4. Accurate Date Mention
Always double-check the date on the cheque to ensure it corresponds with the day the cheque is being issued. This simple step helps prevent future complications and discrepancies. Avoid post-dating cheques to maintain accuracy and transparency.
5. Opt for Permanent Ink
To thwart tampering and fraudulent activities, opt for a ballpoint pen or permanent ink when writing cheques. The use of permanent ink prevents alterations or changes to the cheque content after issuance.
6. Maintain Sufficient Balance
A crucial aspect to avoid cheque bouncing is to ensure that your account holds sufficient funds for the transaction. Inadequate funds in the account are a common cause for cheques being rejected by banks. Always confirm your account balance before issuing a cheque to prevent any disruptions in payment.
7. Record the Cheque Number
Before handing over a cheque, make a note of the cheque number for your personal records. In the event of a dispute or verification requirement, the cheque number serves as a reliable reference point.
