Cancelled Cheque

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What is a Cancelled Cheque?

A cheque is a bill of exchange that facilitates money transfers between two parties. In simpler terms, it is a document you present to a bank to pay a particular amount to another person. 


Often, in financial transactions, you may have come across the term, cancelled cheque. A cancelled cheque leaf is one on which you don’t sign or mention any amount. 


A cancelled cheque means that you have an account with a specific bank and is used in several scenarios, such as: 


  • Applying for loans

  • Making investments 

  • Purchase of high-cost products/services.

How To Write a Cancelled Cheque

You may require a cancelled cheque to complete the KYC process, avail a loan, or when buying an insurance policy. Here is how you can write a cancelled cheque when required:


  • Tear out a cheque leaf from your book.

  • You can simply draw a couple of parallel lines diagonally and write ‘Cancelled’ in between the two lines.

  • Ensure that you write ‘Cancelled’ in block letters (upper case). 

  • Don’t sign anywhere or mention any amount.

What are the Requirements for a Cancelled Cheque?

You must bear in mind certain things when you are writing a cancelled cheque. These include:


  • The cheque leaf should be fresh.

  • The cheque leaf should be part of the cheque book issued by your bank.

  • It needs to contain information like IFSC and MICR code, name and bank address/branch.

  • It also needs to have your name printed on it and your account number printed. 

  • No extra information like the amount, signature or account payee details, etc., should be handwritten.

  • While drawing parallel lines across, make sure not to cover or block out any information on the cheque. The IFSC/ MICR codes, bank address, your printed name and account number are essential details that must be clearly visible. 

  • Hand over the cancelled cheque only to the concerned official or institution after doing your checks, as it contains sensitive details. 

When Do You Require a Cancelled Cheque?

Certain financial transactions require you to write a cancelled cheque, which are:


  • KYC Completion: Know Your Customer (KYC) is a process by which financial institutions verify your details. You may need a cancelled cheque leaf for completing your KYC as your bank details are present on it

  • Bank Account Opening: A cancelled leaf is also needed when you open a new savings or current account

  • Electronic Clearance Services: ECS allows you to perform paperless debits, credits, and transfers/ A cheque that’s cancelled may be required by a service provider or investment firm to start ECS

  • EPF Withdrawal: You may need a cheque that’s cancelled to take out your EPF fund if it has matured. A cancelled cheque will also be required when you take out the funds prematurely

  • Demat Account: Along with proof of address and ID, you must furnish a cancelled cheque to complete the KYC process

  • EMIs: A cancelled cheque is a necessary requirement when you take out a loan or purchase a product in EMIs

  • Insurance: You have to provide proof of your bank account when purchasing an insurance policy. A cancelled cheque acts as this proof for an insurance company

Various Uses of Cancelled Cheques 

A cancelled check is required when carrying out different financial transactions. Here is how it is used most commonly in the following cases:  


  • To Avail Loan: When availing a housing, education or car loan, you would have to make monthly payments. In order to complete the EMI process, the bank or lender would request a cancelled cheque.

  • Purchase on EMIs: A cancelled cheque is asked for when you make an expensive buy on No Cost EMIs on a platform such as Bajaj Markets. You may have to present a cancelled cheque to apply for an EMI Network Card.

  • Opening Trading Account: You may need a cancelled cheque leaf for opening a demat and trading account. 

  • Insurance Policy: Another cancelled cheque example is when you have to submit it to get your insurance policy processed.

Risks Associated with Cancelled Cheques

While generally safe, there are a few risks to note. 


  • Fraudsters can use cancelled cheques for scams, as it has vital details printed on them

  • Cancelled cheques do not require a signature or amount. So, ensure that there is no signature, as fraudsters can forge it

  • Submit the cancelled leaf of the cheque to an authorised institution only, as it contains your sensitive bank information

  • When an institution requires you to sign the cheque, get a supporting document for this requirement

  • Alert the bank without delay if you think that an unauthorised transaction has been made from your bank account

FAQs ON Cancelled Cheques

  • ✔️What are the risks involved in cancelling a cheque?

    Fraudsters can use critical information about your bank account on cancelled cheques to carry out a scam. However, you can avert such a scenario by being vigilant when cancelling a cheque and handing it over to the other party.


  • ✔️What does a cancelled cheque signify?

    A cancelled cheque signifies that your bank account is used in several scenarios, such as applying for loans, trading, or purchase of high-cost products in EMIs.


  • ✔️Can I cancel a check using a red pen?

    Banks, NBFCs and other institutions only ask you to use blue or black ink when cancelling a cheque.

  • ✔️Is it possible for my bank to cancel my cheque?

    No, banks cannot cancel a cheque on your behalf. In case you do not have a cheque, banks will provide you with a chequebook.