Blank cheque

Blank Cheque is a type of cheque where the amount is not specified and must be written in by the person who is cashing it. It is often used as a form of payment in various transactions, and its usage can be traced back to the early days of banking.

History

The concept of a blank cheque has been in existence since the inception of banking. It was initially used as a means of facilitating large transactions without the need for physical cash. Over time, it has evolved and is now used in various forms of transactions, both personal and business-related.

Usage

A blank cheque is typically used in situations where the exact amount of the transaction is not known at the time the cheque is issued. This could be due to various reasons such as fluctuating prices or uncertain costs. The person who receives the blank cheque is then able to fill in the amount when it is known.

Risks

While a blank cheque can be convenient, it also carries certain risks. The most significant risk is that the cheque can be filled in for an amount greater than what was intended by the issuer. This could potentially lead to financial loss or even fraud. Therefore, it is generally advised to only issue a blank cheque to trusted individuals or entities.

Legal implications

In many jurisdictions, issuing a blank cheque can have legal implications. For instance, in some countries, it is considered a criminal offense to issue a blank cheque without sufficient funds in the bank account to cover the amount. It is therefore important to understand the legal implications before issuing a blank cheque.

See also

• Cheque fraud
• Banking
• Financial transaction