An order cheque is a cheque where only the person or party in whose name the cheque has been drawn, can withdraw the cash. The person collecting the cheque has to give an identity proof to encash the cheque. In such cheques, you have to strike out the words “or Bearer” and specify the person to whom the cheque is written for. Only then will it become an order cheque.
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For Example: If Malavika’s name is written on the cheque, only she can present the cheque for payment and get it encashed. No one else will be allowed to withdraw the amount.
The payee can transfer an order cheque to someone else by signing their name on the back of it. This is known as endorsing of a cheque.
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