Home News How to Endorse Checks and When and How to Sign

How to Endorse Checks and When and How to Sign

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Check payments are a widespread mode of payment in the UAE. You may have been asked to endorse a check at the teller counter of a bank without you even knowing its importance. This article will help you understand how checks get endorsed in the UAE and the criteria endorsement.

What is an endorsement of a check?

To endorse means to provide approval of an order. Checks are a secure mode of payment where you endorse it so that the payee party receives the exact amount you have mentioned on it, either through cash or account transfer. The reason to endorse a check is to avoid misuse and fraud.

To understand the same, you will need to understand a check in the UAE. A UAE standard check according to Article 596 of the UAE commercial Transaction will include the following details.

  • Date for payment- When the payment is to be done.
  • Payee name- The party who should receive the payment
  • Amount (In figures and words)
  • Space for a valid signature
  • A printed name, account number and IBAN of the person or the company
  • “Cheque” is mentioned at the top of the check leaf to indicate it is a financial instrument.
  • At the bottom of the check is the check number.
  • Drawee will be the bank name that has to make the payment on behalf of the payee.

How to endorse a check?

Different checks have different ways of endorsements. Below are some of the widespread checks used in the UAE.

Cash Checks

A cash check gets issued for various reasons. If the payee has no bank account, a cash check ensures that the payee receives the sum in cash at the time of presentation of the check at the teller counter.

Endorsing a cash check

Even though account payee checks are a safer mode of payment, cash checks are also a standard mode of payment.

  • Payee name must be the same as valid identification, such as an Emirates ID card.
  • A signature must be done on the back of the check by the issuer and the payee.
  • Since the payee is to receive cash from the bank teller counter, they have to endorse the cheque by countersigning it and writing the contact details such as a phone number. It ensures that the payee accepts the sum mentioned on the check from the issuing party.
  • In cases where the issuer is a company, a company stamp on the back of the cheque is mandatory.
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Account Payee checks (Restrictive endorsement)

Account payee checks are the safest way to ensure financial transactions. Instead of en-cashing the amount at the bank, the payee deposits the check in the bank on behalf of the issuer. It ensures the amount gets directly credited to the person’s bank account. The issuer can also deposit the cheque in the bank to pay to the account of the payee.

To endorse an account payee check, you need to

  • A cheque gets treated as an account payee check by mentioning it at the top blank area of the cheque. The most straightforward way is to add two-strike marks at the left-hand corner of the check, indicating no encashment of the cheque is possible.
  • An “account payee” stamp can also be used to treat the check as an account payee check only.
  • A signature on the back of the cheque by the issuing party and the depositor is a must.

Post Dated Checks

Post Dated checks are cheques issued for a future period. Rental payment and car instalments are common transactions where post-dated cheques are used in the UAE.

To endorse a post-dated check

  • Ensuring the amount is available in the account on the future date mentioned on the cheque, else the cheque will bounce due to “insufficient funds”- Read here about the penalties of bounced cheques in UAE.
  • A signature at the back of the check on every post-dated check issued is a must. In the case of a company, a valid stamp is a must at the back of the check.
  • Most post-dated checks are account payee checks; hence they need to be mentioned as “account payee only” on the top, middle or top left of the check.
  • The issuer must ensure correct details on the post-dated checks because, in case of signature mismatch, incorrect payee name, or amount, there can be a penalty both from the bank and the payee.

Business Account cheques

Banks in UAE ensure that there is the least amount of fraud when it comes to managing business financial transactions through checks. Therefore, a business cheque endorsement is different from a personal check.

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To Endorse a business or company check.

  • A business or company check has designated signatories in the company. The bank will only accept authorized signed checks on behalf of the business.
  • Multiple signatories endorse a check when it comes to business. It is two avoid fraud and illegal movement of money from the company.
  • Most cheques from businesses are account payee checks, and hence cash cheque payouts are very few for transactions such as cash salaries and urgent payments. There each cheque has to be stamped as an “account payee” for account payments.
  • A company stamp at the back of the check is required if the issuer maintains no carbon copy.
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Managers Check

The bank issues the manager check on behalf of a company or an account holder to disburse the payee. For post-dated managers, check the bank is the guarantor to ensure the transfer of funds on the said date. A Managers cheque is also known as Treasurers check or certified check. A managers check is obtained by filing a request form with the bank. The issuer account is then blocked for the said amount or deducted for the amount. On the date of payment, the bank issues the amount as per the instruction of the issuer.

Endorsing a managers check

  • Duly filing the form as per the bank’s requirement
  • Ensuring sufficient funds are available for quick disbursement
  • The check has mentioned “managers cheque” at the top of the check leaf

Since the bank is a guarantor for the payment managers, checks are treated equally as an upfront cash payment.

How to ensure I have correctly endorsed a blank check?

If you find yourself in any financial, legal problem regarding a check payment, click here to contact us today. Our expert team of legal consultants will ensure you receive the correct support.

Endorsing a blank check in the UAE

  • A valid signature as the time of opening the bank account
  • A valid signature on the back of the check
  • A date is not required for a blank check
  • The sum may or may not be mentioned as the party demanded you submit a blank check.

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Christopher Stern
Christopher Stern is a Washington-based reporter. Chris spent many years covering tech policy as a business reporter for renowned publications. He has extensive experience covering Congress, the Federal Communications Commission, the Federal Trade Commission, and other federal agencies. He is a graduate of Middlebury College. Email:[email protected]

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