Everything You Should Know About Black Cheque

Oct 30th 2023

Everything You Should Know About Black Cheque, If you are looking to know everything about a blank cheque, you are at the right place as you will get to know what it is and how to use it. There could be numerous reasons behind the use of a blank cheque and having proper knowledge of the same could be of immense help to you.

Any unwritten and unsigned cheque that is linked to a particular bank account might be referred to as a blank cheque in the literal sense. It is only a possible paperwork for using funds from your account to pay someone else until you sign it and write out the amount. Sometimes, when someone doesn't know how much they have to pay or reimburse someone, they will sign a blank cheque. In a personal loan application, a blank cheque becomes necessary. A blank cheque for a personal loan is meant to inform the lender about the bank details of the borrower where the loan amount will be disbursed and the account from which monthly installment will be deducted. Give your buddy a signed blank cheque to put in the amount—and ideally not more—as payment if you send them to pick up a few items from the shop on your behalf. So, let’s start and get into this.

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What is a blank cheque?

A blank check is one that has the issuer's signature but no further information on it. A blank check carries a significant risk since it is simple for someone to fill it up with any amount and send it to themself.

Additionally, a check from a firm that prints checks might be referred to as a blank check. Until they are utilised for commercial objectives, these checks—also known as cheque stock—must be stored in a safe and secure way.

Salient Features of a blank cheque

A blank cheque taken as a whole is quite dangerous. It is critical to understand its characteristics. The following is a list of some features you should be aware of.

  • Sign it only if it is required.
  • Your bank receives a formal order to take out a certain sum on specially printed paper from your account.
  • There is no information on the cheque about the amount, name, or date.
  • Until otherwise stated, it is a negotiable financial instrument.
  • The check's limit is negotiable.
  • You don't have to sign it if you don't want to pay someone.

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When a person issues a blank cheque?

A blank cheque is essentially written out when the account holder or issuer grants the payee/bearer complete permission to take out and transfer any amount of money. This implies that if you have Rs 20 lakhs in your account and you write a blank cheque to someone, they can take out all or part of the Rs 20 lakhs, and since you signed the cheque, the bank will be responsible for paying.

How to write a blank cheque?

  • First and foremost, write your bank's name in the upper left corner of the cheque.
  • On the "Date" line, which is found in the upper right corner of the cheque, write the current date.
  • Don't fill in the "Payee" line. Usually, you would enter the name of the individual or business here that the cheque is payable to.
  • On the line labelled "Amount in words," enter the amount in words; leave the line labelled "Amount in figures" blank.
  • At the lower right corner of the cheque, sign the document.

Validity of a blank cheque

When a blank check is signed without a date, it may indicate that anybody can use it whenever they like once the date is filled in. Consequently, a date must be mentioned; yet, the RBI standards state that the validity of a cheque is limited to three months. Before April of 2012, the validity of a check was stood at six months.

A blank cheque would be considered a breach of Section 139 of the Negotiable Instrument Act, according to RBI rules.

The need of a blank cheque for a personal loan application

Here are a few noteworthy justifications for providing a blank cheque when requesting a loan.

  • Assessing the potential borrower's signature's legitimacy is necessary. Lending institutions need to gather every piece of information on the borrower, including who gave the loan, which bank they have an account with, and much more.
  • The lending organisation evaluates the check's IFSC number as well.

What is a Cheque leaf?

An instrument used to move money from one bank account to another is called a check leaf, or simply a cheque. Customers of the bank are given a cheque book with a bundle of cheque leaves attached.

  • In order to carry out safe and secure financial transactions, checks were created.
  • With checks, you can move big sums of money between bank accounts without having to make a physical transfer.


Should I need to sign a blank cheque before issuing?

Sure. A blank cheque is only good for what it is signed by the designated signatory. It is nothing more than a piece of paper in a bank without it.

What is the main objective of a blank cheque?

A blank cheque gives someone the freedom to spend as much money as they require or desire. We are unwilling to provide unqualified support to businesses who are having difficulties. A blank check gives someone the freedom to act in a way that best suits their judgement in a given circumstance.

What could be the downsides of issuing a blank cheque?

One major disadvantage of issuing a blank cheque is a person can write whatever amount and may present it in the bank to withdraw the amount. But, doing this is not easy as banks have heightened up their security measures nowadays.

The Conclusion

In India, there are several situations where a cancelled cheque is necessary. First of all, it serves as documentation of payment for a variety of financial activities, including credit card applications, insurance policies, and loan applications. It acts as proof of the name, bank account information, and signature of the account holder. Additionally, it is utilized to give bank account information to other parties to facilitate direct salary and dividend deposits. Additionally, as they give the service provider permission to take the necessary amount out of the account holder's bank account, cancelled checks are used to set up automated bill payments. As a result, it's critical that people maintain a record of all cancelled checks to guarantee seamless financial operations and to prevent any disagreements in the future.


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