cancel cheque

10 Major Reasons You May be Required to Cancel a Cheque

Have you ever been asked by your bank or any other financial institutions to present them with a cancelled cheque when you access their services?

If you keep taking loans, buy products on EMIs, sign ECS, then you may have been asked to provide a cancelled cheque. 

But what are other reasons for which you may need to cancel a cheque? If you are ready to know more, then here is a quick post to help you out! Continue reading!

  • When you don’t want to pay through a cheque 

If you are aware that the person who is getting paid via your issued cheque is cheating on you, then you can stop payment before it gets cleared by your bank. 

  • When your bank is verifying by payment gateway company 

If you are looking to get an online payment gateway, then you may be asked to present a cancelled cheque to the online payment facilitating company. 

  • It may be required for KYC purposes

Sometimes, some companies may need you to cancel a cheque by writing ‘cancel’ across it and draw two lines. They may need to indulge in ‘Know your customer’ formalities. If you are looking for broad information on how to write a cancel cheque you may read the blog.

  • For availing EMI facility on purchased items 

If you are a new customer who wants to buy anything on EMIs by availing the consumer duration loan of that particular service provider, then you may need to submit a cancelled cheque. Many banks and non-banking finance companies (NBFCs) offering consumer durable loan to use the limit to buy items on EMIs may ask for a cancelled cheque. 

  • For getting loans on the EMI basis 

If you are looking to fulfil your many financial needs by availing a loan and want it on the basis of EMIs, then your bank or any other lender will surely need a cancelled cheque. Of course, you may also be needed to present them with proof of identity, proof of address, photographs, Salary Slips, bank statements and more. Still, they may need a cancelled cheque to process your request fast. 

  • For availing EPF funds 

If you look to withdraw your EPF fund, then the Employee Provident Fund Organization (EPFO) may need you to submit a cancelled cheque for its records. They will use the same to ascertain that you are the actual owner of the bank account where they need to transfer to be withdrawn money. 

  • For ECS purposes 

Many times, you may be asked by service providers to present with a cancelled cheque if you want to deduct your money for bill payment or other payments via ECS. 

  • For the opening of a new bank account 

You should also be informed to know that your cancelled cheque is also your ID proof. Why? It’s because a bank (With whom you wish to open a new account with) can consider other bank’s cancelled cheque as a proof that you are a legitimate customer.   

  • For signing up of new insurance policy 

Your insurance company also some time may want a cancelled cheque for its record maintenance purposes. 

  •  For availing new credit cards

Even for the purpose of availing a new credit card, your cancelled cheque may be needed for records as well as KYC purposes. 

Some of the most probable purposes of presenting a cancelled cheque are now discussed. If someone asks for a cancelled cheque, then you may quickly match the needs with those discussed in this post. 

You can ask your bank to get a new cheque book if you have exhausted it or want a new one. You don’t have to be worried at all anymore if someone asks for a cancelled cheque.