What is meant by crossing of cheque?

What is meant by crossing of cheque?

What Is a Crossed Check? A crossed check is any check that is crossed with two parallel lines, either across the whole check or through the top left-hand corner of the check. Therefore, such checks cannot be immediately cashed by a bank or by any other credit institution.

What is crossing of cheque and its types?

General Crossing – cheque bears across its face an addition of two parallel transverse lines. Special Crossing – cheque bears across its face an addition of the banker’s name. Restrictive Crossing – It directs the collecting banker that he needs to credit the amount of cheque only to the account of the payee.

What is crossing of cheque in banking law?

What is Crossing of Cheques? Cheque crossing is recognized in the Negotiable Instruments Act of 1881. Crossing a cheque means drawing two parallel transverse lines between the lines on the cheque with or without additional words such as “& CO.” or “Account Payee” or “Not Negotiable.”

What are the reasons for crossing a cheque?

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 that which appears on the ‘payee’ line of the cheque (i.e. the person who has received the cheque, who is legally the “payee” and “holder” of the cheque).

What is cross cheque and bearer cheque?

The bearer cheque does not contain the name of the payee and is payable to the person who presents it at the bank. A crossed cheque is a cheque drawn in favour of a specific person and the cheque contains two slanting parallel lines at the left upper corner of the cheque.

What are the effects of crossing of cheque?

What are the steps involved in crossing a cheque?

Definition of Crossed Check/ Cheque Crossing means drawing of two parallel transverselines across the cheque with or without the words in between those lines. The crossing of cheque gives a direction to the drawee bank to not pay the mentioned amount at the counter, instead the payment should be done through a bank.

Which crossing is safest form of crossing?

A cross cheque is safer as compared to a bearer cheque as it is crossed i.e, has two parallel lines either on the whole cheque or top left which tells the banker that it cannot be encashed over the counter. It has to be directly deposited in the bank account of the person who’s name is written on the cheque.

Why is crossed cheque safer than open cheque?

When a cheque is crossed, the holder thereof cannot encash it at the counter of the bank. This is not so in the case of a bearer cheque because a bearer cheque can be encashed by anybody who presents it at the counter of the bank. …

What is the effect of a crossing a cheque?

The cheque must be crossed generally or specially. The effect of this type of crossing is that the cheque does not remain negotiable anymore. So safeguard your cheque adequately, next time when you make it and use the types of crossing of cheque.

Can You Tell Me the types of crossing of cheques?

Types of cheque crossing are General Crossing, Special Crossing and Restrictive Crossing . Let us learn about cheque crossing in more detail. A crossing is an instruction to the paying banker to pay the amount of cheque to a particular banker and not over the counter. The crossing of the cheque secures the payment to a banker.

What is meant by crossing a cheque?

Crossing of cheques. A crossed cheque is a cheque that has been marked specifying an instruction on the way it is to be redeemed . A common instruction is for the cheque to be deposited directly to an account with a bank and not to be immediately cashed by the holder over the bank counter.

What do you mean by crossing of any cheque?

Crossing of a cheque means that the cheque is payable only through a collecting bank. Therefor it is not payable at the counter of any bank. Crossing of cheque ensures security to the holder because only the collecting banker can credit the proceeds to the account of the payee.

What is meant by crossing of cheque? What Is a Crossed Check? A crossed check is any check that is crossed with two parallel lines, either across the whole check or through the top left-hand corner of the check. Therefore, such checks cannot be immediately cashed by a bank or by any other credit institution.…