Do you know why you sign the back of a cheque? This is necessary to cash a check!
In some cases, a checkbook may be used. There may be a need to go to the bank and cash the check. Then it is useful to know what is required to sign on the back.
After demonetisation, many people are used to doing wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital money transactions. The use of checks has declined when payment options such as internet banking and UPI are available. Sometimes there may be a need to change the cheque. Then they will ask you to sign the back of the check before getting paid. Let's see why.
On the back of the cheque
If you go to a bank to cash a check, they will ask you to sign the back of the check. Some may wonder why they ask you to sign on the back when the check has the signature of the payer on the front. Many people don't know that there is a reason for this.
Bank officials will not ask you to sign all checks like this. Only some checks require a signature on the back. Which check should be signed on the back? It is good to know which check does not require it.
Bearer Check, Order Check
There are two types of checks namely Bearer cheque and Order Cheque. In this case, the first type of bearer check requires a signature on the back. Another type of order check does not require a signature on the back.
Anyone can cash a bearer check at a bank. Only the person whose name is written on the face of the order check can receive the money. The person should come to the bank with the check and prove that he/she is the person mentioned in it. This is why the order check does not require a signature.
Check Book Application
If someone fraudulently withdraws money through a bearer cheque, the bank will be charged. To avoid this, the bearer checks get the signature of the payee on the back. Thus, the bank is not liable even if the money is given to the wrong person.
As with an order cheque, a person withdraws money by check from his account and does not sign the back of the cheque. At the same time, if you want to withdraw more than Rs.50 thousand through cheque, you must also remember that the bank will ask you to provide an address proof.
