New Delhi: With the help of new technology, online and e banking is fast catching up as the mode of financial transactions. Be it purchasing shares online or transferring amount to some other account, all you need is a few details and internet connection. Your account number, MICR code and other bank details become very important as a slight mistake can lead to a lot of confusion. In cases, when you need to provide details to any organisation, crossed cheques help rule out chances of typographical errors.
Further, a cancelled cheque is held as proof of holding an account.
A cancelled cheque is nothing but a cheque bearing the account number and account holder name which has an inscription “cancelled” across it. Except this, nothing else needs to be written on the cheque. Since the word cancelled is written on it, no one can misuse this cheque. However, the cheque can provide the account number, cheque number and MICR code to whosoever concerned.
You will need to submit a cancelled cheque in the following situations:
Bank account opening
KYC - Know your customer (KYC) is needed for mutual funds, stock investments, etc.
ECS - Electronic clearance service (ECS), which is used for deducting money from your accounts every month also require a cancelled cheque. ECS is quite popular for mutual funds.
EMIs - Various loans and other financial facilities are offered by banks on EMI basis. Banks needs cancelled cheque to complete the process.
EPF withdrawal - To validate your account details, a cancelled cheque should be deposited with the EPFO.
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