Forgot to Sign the Back of Your Cheque? Here’s What You Need to Do

We all know that cheques need to be signed, as they are an important method of money transfer. However, even if you are not paying someone, you may still need to sign a cheque. This is called a canceled cheque. In this case, you must draw two large lines across the cheque and write “Cancelled” between them. Such cheques are usually required for bank account verification. However, sometimes it is necessary to sign not only the front but also the back of the cheque. Let’s find out why and in which situations this is needed.

When is a Signature Required on the Back of a Cheque?

One of the most common situations where a signature is required on the back of a cheque is with a bearer cheque. This means someone has issued a cheque for payment, and the name of the person receiving the money is mentioned on it. When the person goes to the bank to withdraw the amount, they must sign the back of the cheque. This signature helps the bank confirm that the person collecting the money is the rightful recipient.

Why Does the Bank Require a Signature on the Back?

The bank collects the signature on the back to ensure that the person withdrawing the money is the same as the one mentioned on the cheque. Additionally, it protects the bank from liability. The signature serves as proof that the bank has followed proper procedures while making the payment.

Risk of Fraud in Bearer Cheques

Bearer cheques carry a high risk of fraud. The bank cannot verify whether the person presenting the cheque is the rightful recipient. That is why a signature is required on the back. In some cases, if the cheque amount is large, the bank may also ask for address proof to verify the identity of the person withdrawing the money.

No Signature Required for Order Cheques

In the case of an order cheque, a signature on the back is not required. The person whose name is mentioned on the cheque must be present at the bank to withdraw the money. Since the bank verifies all details before making the payment, there is no risk of fraud, and no additional signature is needed.