Payment by cheque is one of the most common ways of doing transactions.
When you owe someone, you can pay by cheque.
Whether it is an account payee or by cash, it is your decision.
But, can you block the cheque payment which is already been issued to a person?
So, let us see what things need to be taken care of when you give someone a cheque for payment.
Whether we can put a stop to the payment of the issued cheque or not, let’s find out.
What is a cheque?
A cheque is a negotiable instrument that is used for fund transfers between one person to another.
A cheque can be issued to a person or an entity for payment of a certain amount.
A cheque can be an order cheque or a bearer cheque. Either way, it can be drawn for payment.
The difference between them is that an order cheque is transferred by endorsement whereas a bearer cheque is a cheque in which the owner is the bearer of the cheque.
The endorsement in a bearer cheque does not mean much. That is why an order cheque is safer when compared to a bearer cheque.
Who can use a chequebook?
Anyone who has a savings bank or current account can use the cheque facility. It includes minors too.
Illiterate persons cannot use a chequebook.
When you have a savings Bank account, if you want a chequebook, see if the account has the facility or not.
Banks have accounts that are with as well as without cheque facilities. If you did not opt for the cheque facility and you do not have the chequebook, it is worth checking your account type.
If not, request the Bank for conversion into a cheque facility account. Then apply for a chequebook.
How to draw a cheque?
It’s one of the easiest ways to pay someone. Drawing a cheque is as simple as filling out your personal details.
You would find details to be filled such as
- Payee’s name
- Amount in word
- Amount in figure
- Space for your signature
Fill it up and give it to the person whose name is written as the payee’s name.
Without any crossing, if you hand it over to him, he can withdraw cash over the counter at the home branch.
You can add a crossing of cheques to specify how the payment would take place.
A parallel line on the extreme top left corner especially means account payee. You may add the word Account Payee between the lines to be more specific.
If you do that, the payee has to encash it through the account payee only. If he does not have an account he cannot get the funds.
How to apply for a chequebook?
Applying for a new cheque can be done quite easily. In all the banks, you may choose to apply online as well as offline.
Offline chequebooks can be applied from the bank only.
For that, you have to visit the bank and fill out the cheque application form available over the counter.
Sign in and hand it over to the concerned staff. It may take a few days to get it delivered to your registered address.
If you cannot go to the bank, you may put in a chequebook request online.
You have got to have active internet banking to do so.
How do you apply SBI chequebook online?
To apply SBI chequebook online, you have to login to the bank’s internet banking and go through the following steps.
- Go to SBI internet banking official website and login with your username and password.
- Go to the menu Request & Enquiries.
- Select chequebook services.
- On the next page, select the account number, and the number of cheque leaves, verify the address and put up the request.
Login to SBI internet banking, and select the menu Request & Enquiries.
Select Chequebook Services and proceed.
Go for the Chequebook request.
Chequebook application on SBI YONO
You can also use SBI YONO to request a fresh chequebook. Follow the steps mentioned below to request a new cheque.
- Open the SBI YONO app and login with your username and password.
- Go to the menu and select Request & Enquiries.
- On the next screen, you will find the options for chequebook requests.
- Click on that and proceed further to complete the process.
Select the menu Service Request.
Go to the cheque button.
Select the option Request Chequebook and proceed further to complete the process.
Benefits of using a cheque
One may get a dozen of benefits from a chequebook. Though we know a cheque is used for cash withdrawal, below is the list of benefits of a chequebook.
- A cheque secures your financial transactions. It consolidates and protects your account from misuse
- A cheque enables you to send money anywhere in the world.
- Cancelled cheques are used for confirmation of your account number, bank, and branch along with the IFCS code and MICR code.
- A cheque can be used for future payment of debts. It can be issued postdated.
- Ownership of a cheque can be transferred by endorsing and transfer.
- A cheque can be endorsed multiple times.
How much can you pay?
How much amount can you pay by cheque? It is actually up to you. It is never seen in any banks that you can transfer this much amount only by cheque.
The amount is unlimited. You can transfer any amount. Transaction limit is found in the non-home branch.
At the home branch, one may transfer without any limit.
Can you block the payment of the issued cheque?
This is one of the most common issues people used to ask about.
At certain times, it happens to all of us. When we issue a cheque to someone and later on we think of cancelling it.
The reasons may be many, some are out of genuine cases others somehow misusing the instruments.
But, can you block the payment of the issued cheque? The answer is no. You cannot stop the payment of an issued cheque.
As per NI Act 1988, once the physical transfer of the cheque happens, you may not be able to cancel the cheque payment.
If you do this without the consent of the cheque owner, it would be a criminal offence. If you want to make a stop payment of issued cheques, you can do so with the approval and consent of the cheque owner.
If actual physical transference of a cheque occurs, there is no way you could block or stop payment of the cheque unless you both agreed upon it.
Otherwise, if you have lost an issued cheque without even a physical transfer of the cheque, you may intimate the bank about the loss and can cancel the cheque which would disable its payment.