3. The cheque bears the words A/C, Payee between the two parallel lines. Manage Settings By continuing to browse this site, you agree to the use of cookies. Post-dated cheques are the cheques where the date present is later than the original date that the cheque was issued. Students like DBA,BBA,MBA,D.COM, B.COMandM.COM may easily get ready for their exams online by visiting us here at businessstudiesnotes.com. The cheque must contain the words 'account payee' or 'account payee only'. What is Crossing of Cheque | Types of Crossing of Cheques, Advantages and Disadvantages of Cheques | How to Write a Cheque, What is Deflation | Causes of Deflation | How to Control It, What is Money | Functions of Money | Importance of Money, Difference between Promissory Note and Bill of Exchange, What is an Endorsement | Example | Essentials | Types of Endorsement, What is Advancing Loan | Principals | Methods of Advancing Loan, What is Dishonor of Cheque | Reasons for Dishonor of Cheque, What is Security | Different Types of Securities in Finance, What is Note Issue | Principles | Methods of Note Issue. This is crossing of a cheque. Both bearer and order cheques can be crossed. Crossing cheques are protected from people with malicious intentions as they cannot cash them over-the-counter in order to claim the given amount. Get all the important information related to the Bank Exam including the process of application, important calendar dates, eligibility criteria, exam centers etc. Business Law Meaning3. Characteristics of a Negotiable Instrument5. We have grown leaps and bounds to be the best Online Tuition Website in India with immensely talented Vedantu Master Teachers, from the most reputed institutions. W Ans. In India, the Negotiable Instruments Act, 1881 is responsible for governing NIs. Types of cheques. When the period of 90 days has passed, the cheque is referred to as a stale cheque. Such crosses, on the other hand, do not affect the paying banker. Only if the transferors title is excellent is the transferees title likewise good. Crossing helps in protecting the interest of the payee of the cheque and makes sure that the amount mentioned in the cheque is transferred only to the account of the intended payee. A document used to make easy payments on demand and can be transferred through hand delivery is known as cheque. Read Complete:1. A bearer cheque can be added to an account payee list by writing Account Payee or crossing it twice with two parallel lines to the left of the top row. Cross Cheque and its Types. It is done in case, the banker, to whom a cheque is specially crossed, does not have a branch at the place of the paying banker, or if he, otherwise, feels the necessity, he may cross the cheque specially to another banker (by clearly specifying). It means that the specified sum of the cheque, regardless of who is handing it over, will only be transferred to the individual/organisation whose name is . Crossing helps in protecting the interest of the payee of the cheque and makes sure that the amount mentioned in the . Crossing of cheque, Types of crossing: A check is a kind of negotiable currency. In these cases, the respective restrictions mandate to pay the cheque through State Bank of India (acting as collecting banker) only. This type of crossing assures that the funds are only moved to a bank account and not supplied in the form of cash. It means that only the individual whose name is mentioned as the payee can receive the specified sum of money. Please consult your financial advisor before making any financial decision. Thus, he becomes the holder in due course and acquires an indisputable title thereto. Hence, just in case of any trace within the title of any one of the endorsers, the title of all the next transferees conjointly becomes tainted. Definition, Characteristics, Types, Parties. The words 'not negotiable' can be added to a crossing. Meaning of a Cheque: A cheque is a negotiable instrument instructing a financial Institution to pay a specific amount of specific currency from a specific demand account held in the name of the maker/depositor's name with that institution. Aspirants can check the linked article for the latest government exams in India. A crossed cheque could be a cheque that's collectible solely through an assembling banker and indirectly at the counter of the bank. Ans. Crossing prevents fraud and wrong payments. It means that the specified sum of the cheque, regardless of who is handing it over, will only be transferred to the individual/organisation whose name is mentioned as the payee. Cheques have been a very useful invention, allowing people to shift funds from their bank accounts in a safe and effective manner. This form of crossing indicates that the cheque can only be deposited in an account in a bank or some other specified institution. Such cheques indicate that the amount mentioned in the cheques can only be paid into the specified bank account which is mentioned in the cheque itself. The contents are generic in nature and for informational purposes only. Adding a crossing to a cheque increases its security in that it cannot be cashed at a bank counter but must be paid into an account in exactly the same name as the payee or indorsee indicated on the check. Whereas a crossed cheque isn't collectible over the counter however shall be collected solely through a banker, the quantity collectible for the crossed cheque is transferred to the checking account of the receiver. The payment of such cheques can be stopped by the drawer by writing a letter to the banker regarding loss of cheque. Meaning of a Cheque 2. See Also: What is Money | Functions of Money | Importance of Money. Cross checks are also frequently detected by drawing two parallel intersecting lines. It's the safest type of cheque to write because only the person whose name appears on the cheque will have money sent to their account. Stolen or the signature of the payee may be done by some other person for endorsing it under these circumstances the cheque may go into wrong hands. A cheque of this kind does not bear any crossing over their face. This is often therefore as a result of it's not his duty to see that the cheque is collected for the account of the receiver. For the aim of general crossing 2 crosswise parallel lines at the corner of the cheque are necessary. The way a cheque is crossed specified the banker on how the funds are to be handled, to protect it from fraud and forgery. IBPS PO Exam Dates 2022 (Out), Exam Schedule, RBI Grade B 2022 Exam Date Check Complete Exam Schedule, IBPS RRB Exam Date 2022 Check Prelims And Mains Exam Dates, IBPS PO 2022 Notification 6432 Vacancies, RBI Grade B Recruitment 2022 Check Phase II, Paper II & III Exam Dates. In this cheque, the phrase "or bearer" is written after the name of the payee. Allow us to study cheque crossing in additional detail. You can just see the words: "Pay to or bearer" The cheques can be . A complaint can be made only by the payee or the holder within one month of expiry of 30 days of the receipt of notice by the drawer. This cheque can only be encashed in the account holder's or the drawer's bank. In general crossing, the cheque bears across its face which includes the addition of 2 parallel crossing lines with little spacing between them, within the case of general crossing on the cheque, the paying banker pays cash to any banker. There are many. General Crossing of Cheque. The move by SBI comes after the RBI asked banks to start such a system . Cheque meaning crossing and types 1. Crossing prevents fraud and wrong payments. General Crossing - cheque bears across its face an addition of 2 parallel crosswise lines. Such cheques, when submitted to banks before the date mentioned on the cheque, are not processed until the date is finally reached. Crossing of cheque provides instruction to the paying banker to pay the amount through banker only, and not directly to the payee or holder presenting it at the counter. Between the two parallel transverse lines the options are to add certain words like and company, & company or not negotiable. Self Cheque. The receiver of the cheque cannot legally cash the cheque and must instead deposit it into an account. Although the best known are bearer and nominative cheques, there are several more types, which we explain below: Certified cheque. The instruction provided above defines the amount claimed in the Cheque would be deposited immediately into the account of the Cheque bearer under Section 123 of the Negotiable Instruments Act, 1881. Where some customary instruction is written between the two parallel transverse lines (constituting crossing of cheque) that may result in imposing certain restrictions on the collecting or paying banker, it is called restrictive crossing. Drawee: The party on whom the cheque is written, i.e., your Bank. 4. Poverty is the hardship of food, shelter, wealth, and clothing. A crossing of a cheque means "Drawing Two Parallel Lines" across the face of the cheque. Crossed Cheque. To make cheques secure and useful, crossing of cheques was adopted. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The contents of this article/infographic/picture/video are meant solely for information purposes. Oliveboard is a learning & practice platform for premier entrance exams. The effect of such a crossing is that it removes the most important characteristic of a negotiable instrument (according to section 123). Get subscription and access unlimited live and recorded courses from Indias best educators. Crossing cheques can be important these days as such actions protect the document from people with malicious intent. The example is "State Bank of India". Usually, it is advisable to put it on the top left corner of the cheque. Difference Between Sale And Agreement To Sell, Characteristics of a Negotiable Instrument, Presumptions as to Negotiable Instruments, What is Memorandum of Association? Hence, even if it is presented to the bank, the bank will not process it until the mentioned date. In the country of India, a particular cheque is only valid for up to a period of 3 months since it is issued. Merger - IDFC Bank and Capital First Ltd. OTHER FORMS OF CHEQUES. An open cheque can be cashed at either of the banks, namely, the payers bank or the payees bank. Types of Crossing: 1. Where the assembling banker credits the return of a cheque bearing such crossing to the other account, he shall be guilty of negligence. The bankers name is added across the face of the check in special crossing, with or without the phrase not negotiable.. Lets take a closer look at cheque crossing. A stale cheque is a cheque that is not valid anymore or has expired. General crossing, Special crossing, and Restrictive crossing are the three types of cheque crossing. Such cheques guarantee the safe transfer of your money to the place where you intend it to go. However, in some cases, if both the parties involved have mutual agreement and trust in each other, then Account Payee Only crossing can be relaxed for certain purposes. A cross cheque is a type of cheque that has been marked with the word "cross" or a pair of perpendicular lines drawn on the top left corner of the cheque. Dissemination of information on Digital Banking. Types of Delivery3. 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