When is it necessary to sign on the back of a cheque? Even those who have been going to the bank for years do not know this!

Cheques have been used for years in money transactions. Cheques are also used in many ways. One such way is to sign on the back of a cheque. You must have often seen that some people sign on the back of a cheque. So is it necessary to sign on the back of a cheque in a particular situation or do people not sign on the back of a cheque just like that? Let us find out.

If your cheque 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 on such cheques. In such a situation, one problem can be that the person who has brought the cheque may have found it lying somewhere.

To keep themselves safe, banks get the signature of the person who has brought the cheque on the back of the cheque. By this, they ensure that the money withdrawn from the cheque has been given to the person who brought the cheque and if that cheque has been encashed by an unknown person, then the bank has no role in it.

Bearer cheque means that through this, any person who reaches the bank with that cheque can withdraw money. That is, even if someone's name is written on the cheque, still another person can withdraw money from that cheque. So, to avoid any fraud or irregularity, the bank gets the person who reaches the bank with the cheque to sign on the back of the cheque.

There are some cases in which the bank asks for the address proof of the person who reaches the bank with the bearer cheque. This happens especially when the amount of the cheque is big. In such a situation, the bank takes the address proof of the person who brings the bearer cheque, so that if any fraud arises in the future, that person can be contacted or action can be taken against him.

In the case of an order cheque, a signature is not required on the back of the cheque. In an order cheque, money is given only to the person whose name is written on it. It is also written on this cheque that it is an order cheque and not a bearer cheque. It is necessary for that person to be present in the bank while encashing this cheque. This is the reason why signature is not required on order cheque.

However, before giving money on order cheque, the bank employees themselves do a thorough investigation and give money only after being satisfied. In this, it is necessary to ensure whether the name written on the cheque is of the person who has brought it or of someone else.