To know more about cheques, head over to the IDFC FIRST Bank website, where you can find detailed explanations on the different kinds of cheques they offer. Furthermore, cross cheques are often identified by drawing two parallel intersecting lines. 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). Post Dated Cheque. General Crossing Cheque. When two slanted or parallel lines are drawn in left hand side of cheque, it is known crossing of cheque. Cross checks are also frequently detected by drawing two parallel intersecting lines. Banking and E-Banking Definition, Types, Functions and FAQs, Business Environment - Definition, Components, Dimensions & Examples, Planning Premises - Introduction to Planning Premises, Importance, and Types, Revenue Deficit - Differences, Calculations, Formula and Disadvantages, Organizing - Meaning, Process, and In Every Aspect of Life, Importance of Consumer Protection - Explanation and FAQs, Difference Between Microeconomics and Macroeconomics, Karl Pearsons Coefficient of Correlation, Find Best Teacher for Online Tuition on Vedantu. When the word "Bearer" on the cheque is not crossed or cancelled, the cheque is called a bearer cheque. A stale cheque has already passed its validity date and can no longer be cashed. Answer (1 of 5): All cheques are bearer cheques. 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. Manage Settings If you have any further queries or suggestions regarding this post, you can connect with us on, Latest Pattern SSC CGL Tier 2 Mock Test Attempt Now, Latest Pattern SSC CHSL Tier 1 & Tier 2 Mock Tests Attempt Now, Must Know Age Problems for Bank Exams | RBI Grade B | IBPS PO | Indian Bank PO, What You Must Know About Coding Decoding | RBI Grade B | IBPS PO, Best Telegram Group for Banking Aspirants. An Open Cheque is a cheque which can be presented directly to the bank for payment over the counter of the bank. Section 5 of The Negotiable Instrument Act, 1881. The non-negotiable crossing is a type of crossing in which the payee does not acquire the right to negotiate the cheque further. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Weve spent the time in finding, so you can spend your time in learning. Essential Elements of a Valid Contract, It is the duty of the seller to deliver the goods and of the buyer to accept and pay for them, in accordance with the terms of the contract of sale. Sec. Tell us what you think about our article on Types of Cheque Crossing | Business Law in the comments section. Usually, it is advisable to put it on the top left corner of the cheque. And the promissory note is issued by thedebtor. Meaning of Negotiable Instrument4. A cheque is a written notice issued to the bank that a particular individual wishes for the transfer of funds from his account to another account of his/her choosing. Transactions through Cheques are quite common these days. We may, however, arrange for a crossed bearer cheque to be delivered and a crossed order check to be delivered through endorsement and delivery. What is the advantage of crossing a cheque? Its collectible over the counter on a presentation by the receiver to the paying banker. Hope you find the information useful. It can be Bearer Cheque or Order Cheque . The Negotiable Instruments Act, 1881, sets out in Section 123 - 131 the provisions concerning the crossing of cheques. Crossing two parallel transverse lines is not necessary in this case, but the bankers name is essential. General Crossing - cheque bears across its face an addition of 2 parallel crosswise lines. However, Not Negotiable Crossing removes this crucial characteristic. 2023 All Right Reserved Oliveboard Pvt. Furthermore, just painting the lines without any text would not change the function of the crossing check. Both bearer and order cheques can be crossed. In either case, the words non-negotiable. You have entered an incorrect email address! Home Others Banking What is Crossing of Cheque | Types of Crossing of Cheques. Crossed cheque. Presumptions as to Negotiable Instruments6. The check can be crossed in a variety of ways, each with its own set of consequences. It can only be cashed after the date specified by the payer. Restrictive Crossing - It directs the assembling banker that he has to credit the number of cheques solely to the account of . The format and wording varies between countries, but generally, two parallel lines may be placed either vertically across the cheque or on the top left hand corner of the cheque. Types of Crossing: 1. Meaning, Content, Articles of Association: Definition, Example, Contents, Alteration, Performance of a Contract | Sale of Goods Act 1930, What is Cheque? Given below is the list of the various cheque types: Bearer Cheque. W Ans. The format and verbiage vary between countries, however, usually, 2 parallel lines could also be placed either vertically across the cheque or on the highest corner of the cheque. Crossed cheques must be presented through the bank only because they are not paid at the counter. The payment to a banker is secured by crossing the check. However, in special crossing 2 parallel crosswise lines don't seem to be essential, however the name of the banker is most significant. See Also: Advantages and Disadvantages of Cheques. This is because it is not his responsibility to ensure that the check is collected for the payees account. Unlike cash, cheque payments are recorded with the bank and reflect in your bank account. Please consult your financial advisor before making any financial decision. These cheques have the words or bearer printed in front of the name of the payee. An open cheque can be cashed at either of the banks, namely, the payers bank or the payees bank. It conjointly traces the person, therefore, receiving the quantity of cheque. It becomes useful when you are heading on a foreign trip and do not wish to carry too much cash. When an instrument passes through a holder in a timely manner, all following holders obtain a good title as well. As a result, if the title of any one of the endorsers is contaminated, the title of all future transferees is equally polluted. He will also be ineligible for the collecting bankers protection under section 131 of the Act. If a bearer cheque is lost . Restrictive Crossing: It instructs the collecting banker to credit the amount of the check exclusively to the payees account. Read Complete:1. The importance of this type of crossing highlights that the cheque is not negotiable anymore. The cheque was returned or dishonoured for insufficiency of funds. A cheque is a document that tells your bank to transfer the mentioned amount to a person or organisation. A cheque holder which has crossed any single leaf of cheque either generally or in a special case. Truncated Cheque4. 3. Promissory Note, on the other hand, is a promise to pay a certain amount of money within a stipulated period of time. Crossed cheques: A crossed cheque is one which has Iwo short parallel lines marked across its face. Also Read:1. A cheque is either "open" or "crossed". We'll try to cross-check in depth below. The holder of a crossed cheque must pay it to his account. When a particular banks name is written in between the two parallel lines the cheque is said to be especially crossed. The payment will be received in that countrys currency. The drawer of cheque has failed to make a payment within 30 days of demand made. The crossing of the cheque is an instruction to the paying banker to pay the amount to a specific person. Aspirants can check the linked article for the latest government exams in India. Within the lines, two or more statements such as 'and company' or 'not negotiable' may be fixed. Save my name, email, and website in this browser for the next time I comment. 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. In this scenario, the transferee does not get the holders rights in a timely manner. Also, once the instrument passes through a holder in due course, all the next holders conjointly receive an honest title. Thesecond part(Sections 124-238) deals with certainspecial kinds of contracts, namely contracts of Indemnity and Guarantee, Bailment, Pledge, and Agency. Purpose: - The crossing is to warn the bank to not to make payment of crossed cheque over the counter. It is not a substitute for specific advice in your own circumstances. Crossing cheques is a means of securing payment from an individual or business. Restrictive crossing acts as an additional layer of security for the beneficiary as the payment is only made to him/her. By using crossed cheques, cheque writers can effectively protect the instrument from being stolen or cashed by unauthorized persons.[1]. The drawer usually issues a self-cheque to his or her self. An account payee cheque is another name for a crossed cheque. Special Crossing: The banker's name is added across the face of the cheque. Did we miss something in Business Law Note? There are three types of crossed cheque. 4. TYPES OF CHEQUES. The indication is that this type of cheque lacks security. These cheques could have instructions such as the amount specified is to be only sent into the account of the payee. The contents are generic in nature and for informational purposes only. POST-DATED CHEQUE. General crossing, Special crossing, and Restrictive crossing are the three types of cheque crossing. Example of Bill of Exchange2. By using a crossed cheque, one can make sure that the amount specified cannot be en-cashed but can only becredited to thepayees bank account. 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