April 26, 2023

What is Blank Cheque & How to Give Blank Cheque: Meaning, Validity, & Leaf

The term “blank cheque**”** frequently refers to a cheque that has been signed by an authorised cheque signer but does not include any additional information like date, payee or amount. In certain cases, it becomes essential to give a blank cheque to someone depending on the requirement or demand.
Now, if you are thinking about whether to give a blank cheque to someone or not, you must check some of the aspects. In the following sections, you will know everything about the blank cheque and how to use a blank cheque if required.

What is Blank Cheque?

The meaning of a blank cheque refers to one that is signed by the issuer without any details. Blank cheque comes with high risk as if lost anyone can easily fill in any amount and issue it to themselves.
Also, you can refer a cheque from a cheque printing company as a blank cheque. These cheques are also referred to as cheque stock and it is necessary to keep them in a safe and secure manner until they are used for business purposes.

Example of Blank Cheque

Now that you are aware of blank cheque meaning, let’s consider an example for understanding the scenario of a pre-signed bank cheque in detail.
Suppose, in a small business the owner is only an authorised signer. The office manager will take charge while the owner goes on a brief vacation. The owner gives his manager three company cheques with only the owner's signature in case of any payment needs. In essence, the owner has faith in the office manager's ability to only process these cheques for a legitimate business transaction. However, sometimes it may not happen. Someone else could find the signed cheque and fill them out with any name and amount they want.

What are the Features of a Blank Cheque?

As a whole, a blank cheque is quite risky. It is important to be aware of its features. Here is a list of certain features that you must remember.
  • You can sign it, only if necessary.
  • A written order is given to your bank to withdraw a specified amount from your account on specially printed paper.
  • The cheque does not have any information related to the date, name or amount.
  • It is a negotiable financial instrument unless otherwise indicated.
  • You can define the limit on the cheque.
  • If you don't want to pay someone, there is no need to sign it.

What is the Blank Cheque Validity?

If you failed to mention a date in a blank cheque it can signify that any individual can use it at any point in time after filling in the date. Therefore it is necessary to mention a date, however, as per the RBI guidelines cheque validity time is only 3 months. Prior to April 2012, a cheque was valid for 6 months.
Under the RBI guidelines, a blank cheque would attract in violation of Section 139 of the Negotiable Instrument Act.

How to Issue a Blank Cheque?

To understand the circumstances, there are three types of scenarios to refer to.
If you want to give a blank cheque as proof, then it is necessary to issue it by
  • Don’t sign the blank cheque.
  • Cancel it without signing it and write the word “Cancelled” between two parallel lines.
  • Also, ensure that the lines of cheque used for NEFT and RTGS should not cover any of the information.
If you to use a blank cheque out of faith or love, then you can issue it by
  • Sign the blank cheque
  • Specify the amount limit like "Not over ₹20,000".
  • You can just make an account payee.
In the event of a loan, when a blank cheque is utilised for security purposes
  • You can give your blank cheque, to companies and societies in case you want a loan or an advance.
  • You can also sign the blank cheque and specify the amount limit.
  • You should only give it to the person you have high faith or trust in.

Why Blank Cheque is Needed During the time of Applying for a Loan?

Here are some of the notable reasons to offer a blank cheque while applying for a loan.
  • It is needed to evaluate the authenticity of the signature of the potential borrower. For lending institutions, it is necessary to extract all information related to whom the loan is given, which bank which the borrower has an account with, and many more.
  • The lending institution also assesses the IFSC number present in the cheque.

Final Word

A cheque reflects various information about your bank, such as cheque number, MICR code, and IFSC code. Therefore, issuing a cheque signifies that you authorise someone to transact with your account. In this regard, issuing a blank cheque holds risk and can be hazardous if someone fills any amount and issues it to themselves. Refer to the above sections to get a detailed idea about blank cheque, their features, usage and when to use one.

Never miss a trading opportunity with Margin Trading Facility

Enjoy 2X leverage on over 900+ stocks

Upstox Margin Trading Facility
Apple Logo
Downloadlogo
iOS App
Google Play Logo
Downloadlogo
Android App

RELATED ARTICLES

ICICI NEFT Form

The digital payment wave has swept the Indian banking ecosystem with the sheer rise in the volume of electronic payment transactions across channels such as mobile wallets, PoS terminals, UPI, IMPS!, NEFT, AEPS etc. Just to give you a perspective, the total yearly volume of digital payments across channels has increased from 14.59bn to 71.59bn in 2022, registering a staggering 4.9x rise in volume. Source:www.statista.com Clearly, the value proposition for digital banking customers is too good to ignore , given the speed, safety, seamlessness, of digital banking transaction Against this backdrop, the central regulatory authority, the RBI has outlined the next phase of growth 'Payment Vision 2025' based on the 4Es value proposition of digital banking- E-Payments for Everyone, Everywhere, Everytime. One such digital banking transaction/payment channel is the NEFT, National Electronic Funds Transfer. Introduced in November 2005 by the RBI, NEFT allows retail customers across India to transfer funds electronically from one NEFT bank branch enabled account to either the same or any other bank within India. The NEFT service is available 24x7 ( with effect from Dec 16, 2019 as per RBI guidelines). There is no need to visit the bank branch as NEFT transfers are made through digital channels (net banking and mobile banking) everytime, everywhere, everyone. Besides, the NEFT facility can also be availed for making credit card payments and for payment of loan EMI. For example, let us say you have an active account with ICICI Bank. You can make NEFT payment through the following channels. - Visit ICICI bank branch - Netbanking - iMobile Pay - m.icicibank.com - Pockets app - ICICI bankpay Founded in 1994, the Vadodara headquarters ICICI bank, is one of India's leading private sector player with a strong domestic and international presence through its network of 5,275 branches and 15,589 ATMs across India and footprints across 17 countries worldwide. The bank had consolidated asset base of ₹16.8 lakh crore (as on December 31, 2021). Let us take a deeper look at the nuances of NEFT transaction steps via digital payment channels such as netbanking and mobile banking. For starters, you need to add a beneficiary account details and always ensure that accounts of payee and beneficiary are in active state.

What is a Bank Account Number in India & How to Know It Online from Mobile Number

Bank Account is nothing but a financial account maintained by the bank or any other financial institution to assist the financial transactions made between the bank and the customer. It links the bank account holder to the bank so that all transactions can be recorded. There are different kinds of bank account offered by the bank that comes with different set of terms and conditions. Some common types of bank accounts are savings accounts, deposit accounts, current accounts, loan accounts and so on. Bank customers can open more than one account depending on their needs. Funds are deposited with the bank by the account holder under the bank account. These deposit funds are a liability for the bank but an asset of the depositor, which can be claimed anytime. In the case of Loan accounts, Bank lends some of its deposited money to its loan account holders or third party on interest. It is exactly the opposite of what deposit accounts do. A loan account serves as an asset for the bank but a liability for the depositor.

HDFC Bank Mini Statement by Missed Call/Toll Free Number, SMS, & Online

HDFC Bank is one of the most reliable private banks in India. It is popular among customers for its round-the-clock services and a vast range of financial services and product offerings. With the aid of advancements in technology, HDFC Bank has made all its services available to its customers at their fingertips, saving a lot of time and hassle. You can get your HDFC mini statement, transfer funds, check your account balance, etc. on the go from anywhere at any time. Here is a detailed guide on HDFC mini-statement and how you can get one.

A Historical Analysis of Demonetisation: Lessons from Around the World

Demonetisation is a significant policy decision that various countries have implemented worldwide to address economic challenges and promote financial reforms. In this blog post, we will explore the concept of [demonetisation](https://upstox.com/savings-account/what-is-demonetisation-meaning/), highlight several countries that have undertaken this measure, including India, and examine the motivations, impacts, and lessons learned from these exercises. Let's dive into this fascinating topic.