When does one have to sign on the back of a cheque? Even many people who have been going to the bank for years do not know this!
Checks have been used in money transactions for years. Checks are also used in many ways. One such method is to sign on the back of the cheque. You must have often seen that some people sign on the back of the check and many people do not sign on the back of the cheque. So is it necessary to sign on the back of a check in any particular situation or do people simply not sign on the back of a cheque? Let us know.
If your check is a bearer cheque, then it is necessary to sign on the back of it. This is because many times no one's name is written in such cheques. In such a situation, a problem could be that the person who has brought the check may have found it dropped somewhere. In such a situation, to keep themselves safe, banks get the signature of the person bringing the check on the back of the cheque. With this they ensure that the money withdrawn from the check has been given to the person who brought the check and if the check has been encashed by an unknown person then the bank has no involvement in it.
Bearer check means that any person can withdraw money through it, who reaches the bank with that cheque. That means, even if someone's name is written on the cheque, any other person can withdraw money from that cheque. So, to avoid any fraud, banks get the person who reaches the bank with the check to sign it on the back.
There are some cases in which the bank asks for the address proof of the person carrying the bearer cheque. This happens especially when the check amount is large. In such a situation, the bank bearer takes the address proof of the person who brought the cheque, so that if any fraud arises in future, that person can be contacted or action can be taken against him.
In case of order cheque, signature is not required on the back of the cheque. In the order cheque, money is given only to the person whose name is written on it. It is also written on this check that it is an order check and not a bearer cheque. While encashing this cheque, it is necessary for the person to be present in the bank. This is the reason why signature is not required on the order cheque. However, before giving money even on order cheque, the bank employees themselves do a thorough investigation and give the money only after being satisfied. In this, it is important to ensure whether the name of the person who has brought the check is his own or someone else's.
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