Cheque Signature Rule: Every account holder should know some important rules for the use of chequebook. In the absence of correct information, a person can become a victim of big fraud. It is necessary to sign a cheque at the right place so that it remains valid and safe. If you sign the back of the cheque and give it to someone, it can create financial risk. In such a situation, it is important to know in which situation to whom to give the cheque, so that loss of money can be avoided. (Bank cheque rules)

Pay attention while signing the back of the cheque?

A cheque is a written guarantee of a financial institution or personal cash withdrawal. It can be understood as if it is usually a written order to a bank to pay a fixed amount from one account to another.

The cheque is considered by the bank as a safe, secure, and convenient way to transact between two parties. Signing on the cheque or its back has a special meaning in the language of the bank. Not all types of cheques are signed on the back. Only bearer cheques are signed on the back.

Bearer's cheque is the type of cheque that is deposited in the bank and does not have the name of any person on it. With the help of that cheque, anyone can withdraw cash from the bank. The bank considers the bearers cheque as a transaction issued with consent. According to the rule, the bank is not responsible for fraud caused by such a cheque.

Important things related to the cheque-

- A cheque can be issued for a current or savings account.

- Only the payee named on the cheque can encash it.

- A cheque without a date is considered invalid.

- A bank cheque is valid for three months from the date of issue.

- There is a 9-digit MICR code at the bottom of the cheque which facilitates the cheque clearance process.

- The amount of the cheque should be written in both words and figures.

- The person issuing the cheque should sign the cheque without overwriting.

- The name of the recipient should be properly written on the cheque.