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The internet has taken over the world and has changed how things would work earlier. It has modernised how the banking sector works too. Internet banking provides facilities that eliminate the need for customers visiting the bank branches for services such as money transfer, cash withdrawal, and others. This has considerably reduced the use of cheque books, deposit slips, and other paper forms that were an essential part of banking services earlier. However, you must know what a cancelled cheque signifies and the situations a cancelled cheque can come handy.
A cancelled cheque refers to a cheque that contains two parallel lines drawn across the layout. It is also necessary to write the term ‘cancelled’ between these lines. You need not make a signature on the cancelled cheque. The cancelled cheque will be used to gather details such as account number, account holder’s name, MICR code, name and branch name of the bank, and IFSC.
In a different context, a cancelled cheque is a cheque for which payment has already been done. The moment cash is drawn with a cheque, the bank marks it as cancelled. Once it is cancelled, the cheque cannot be used as an authorisation for the removal of additional funds from the payer’s account.
A cancelled cheque works as a proof for opening an account with a bank. You can submit a cancelled cheque in many cases to confirm your bank account details.
You may have to submit a cancelled cheque in the following cases: