A cancelled cheque is a proof that you are the holder of account to which your loan will be linked. As the name suggests, a cancelled cheque is any kind of cheque that has been crossed with the two lines and the word ‘cancelled’ is written across the paper.
Many banking and non-banking financial companies (NBFCs) such as Bajaj Finserv need its customers to submit a cancelled cheque along with other documents at the time of buying a product on EMI. Cancelled cheques are usually required at the time of applying for a loan, investing in mutual funds, setting ECS mandates, and more.
Additional Read: How to write a cancelled cheque