Cancelling a Cheque

Cheques need no introduction to the banking customers. It’s one of the traditional and important banking instruments which is still in demand though digitalization is taking over several other ways banking is done. The usage of cheques is very easy and the limitations are less when compared to other banking modes these days unless it requires the physical presence of the individual to withdraw the cash from the cheque. 

There are different terms involved with a cheque that describes the working of the cheque like post-dated cheque, the validity of a cheque, bounced cheque, cancelled cheque etc. 

What is a cancelled cheque? 

A cancelled cheque is a cheque that says that the cheque is cancelled and money can’t be withdrawn using these. The issuer of the cheque who would be the account owner can write “cancelled” on the cheque to declare it’s cancelled. 

When is a cancelled cheque required? 

Usually, a cancelled cheque acts as an important document for multiple purposes related to finances like, 

  • Loans – While applying for a loan, banks or financial institutions ask for cancelled cheques.  
  • KYC – For KYC (Know Your Customer) on investments like mutual funds, stocks, etc. companies are asking for the cancelled cheques. 
  • EMI – Certain purchases like EMIs for electronics, mobiles, loans, etc require cancelled cheques. 
  • Insurance policy – Certain insurance providers ask for a cancelled cheque for a few types of policies like health insurance, etc. 

Cancelling a Cheque 

The reason a cancelled cheque is asked by any bank or financial institution is just to get the details of the account holder like bank name, account number and IFSC code of the bank. 

While issuing a cancelled cheque, just draw two lines over the cheque and write “cancelled” which is visible clearly.  

Note that you need not sign a cancelled cheque as it’s issued only for the purpose of details and it is always recommended to take a photocopy of the cancelled cheque so that it serves as proof if someone misuses it anytime in the future. 

Cancelling a cheque in the UAE after issuing it? 

Usually, cancelling a cheque after issuing it is called “protest to a cheque” in banking terms. According to the Central Bank of the UAE’s new Commercial Law of Transaction, from January 2, 2022, the “protest to a cheque” rule is invalid. This means the account holder is not allowed to cancel a cheque after issuing it. 

Though there are certain expectations to this law of cancelling a cheque, 

  • An issued cheque can be cancelled if the cheque book is lost or stolen. This can be reported by either the cheque issuer who lost the cheque or the bearer who lost the cheque.  
  • Cancelling a cheque is allowed only If the account holder is declared bankrupt/insolvent by the court

Only in these two exceptions, the account holder can provide an official letter by visiting the bank requesting to stop the cheques to proceed further for debit. 

Apart from these exceptions, the account holder won’t be allowed to cancel a cheque in the UAE. 

Meet the author
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Nikitha is a Senior Analyst at She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.

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