What is endorsement of cheque

Endorsement of a cheque refers to the process of the payee signing their name on the back of the cheque to authorize the transfer of funds. This act serves as a security measure, verifying the identity of the recipient and giving the bank permission to process the transaction. Common types of endorsement include:

• Blank Endorsement: A simple signature, allowing anyone to cash or deposit the cheque.
• Restrictive Endorsement: Includes instructions like "For Deposit Only," ensuring funds are only credited to the payee's account.
• Special Endorsement: Directs payment to a specific third party.