Importance of Signature on a Cheque

The signature on a cheque means that the person who has signed it is giving permission to the bank to take money out of his or her account.

When you give a cheque to the bank, keep in mind the following:

• Make sure the signature of the person who issues the cheque matches with the signatures in his bank records.
• If your signature on the cheque mismatches with your signature in the bank records, then the bank can return the cheque. The bank can also charge a cheque return fee for this.

A signature mismatch can attract a penalty if the bank decides to return your cheque.

However, if the cheque was issued to clear a debt or liability, such a return can also have legal consequences.

For example: If a person deliberately signs differently to avoid payment, the person receiving the cheque may file a cheque bounce case. If it is proven that the signature mismatch was due to forgery, then this would not apply since the cheque cannot have been said to be issued by the drawer.