This means that you can pay a bill in Delhi by cheque even if your account is in some different city. If there is any mismatch or spelling mistake the cheque will not be paid 3. Cheque is a very common form of negotiable instrument. Crossings are of many types:. An order cheque can be a bearer cheque if the words or bearer are not cancelled out. This serves two purposes - you can keep a track of who encashed your cheque and also ensure that even if the cheque is lost, it cannot be misused by anyone. Crossed bearer cheques or crossed order cheques will be paid through account only and as such in the case of crossed cheques, the bearer and order have no meaning since the identity of the party is already ensured by means of account with the bank.
What we had discussed in the foregoing paragraphs are about open bearer cheques or open order cheques. This is called a cash cheque. It is really a useful information to anybody like me. Mutilated Cheque When a cheque is torn into two or more pieces and presented for payment, such a cheque is called a mutilated cheque. These cheques may be cashed at any bank and the payment of these cheques can be obtained at the counter of the bank or transferred to the bank account of the bearer. Crossed checks are rarely used in the United States; any individual attempting to deposit a crossed check in the U. Hence, it must not be encashed or paid.
Remember to Cross the Cheque Crossing a cheque means putting two parallel lines on the left hand top corner of the cheque. The effect of such a crossing is that it removes the most important characteristic of a negotiable instrument: the transferee of such a crossed cheque cannot get a better title than that of the transferor cannot become a holder in due course and cannot convey a better title to his own transferee, but the instrument remains transferable. No cash will be paid directly to the customer. They operate an open cheque book using our money, making ridiculous decisions, never having to explain or apologise if things go wrong and thinking as they sit in their luxury offices our money , receiving unwarranted salaries our money and incredible pensions and benefits our money that they can ignore the majority of people as long as they are all right. An order cheque can be paid to the named payee across the bank's account if so presented. Next to this will be a space box for you to write the amount again but this time as numbers. A bearer cheque can be collected by the bank for the credit of anyone's account.
Person B will be able to use this c … heck to get the money due to him from person A. An open check is an uncrossed check which is payable on presentation of the check at the counter of the banker on whom they are drawn. Most commonly, it is used to ensure a bank only deposits the funds into an actual bank account and does not immediately cash it upon initial receipt. The advantage of crossing is that it reduces the danger of unauthorised persons getting possession of a cheque and cashing it. To do this you must go to your bank and sign a stop-payment order. Generally-crossed cheques can only be paid into a bank account, so that the beneficiary can be traced. In other words, the holder or the Transferer , when giving it to another person need not endorse the cheque.
If you have a savings bank account or current account in a bank, you can issue a cheque in your own name or in favour of others, thereby directing the bank to pay the specified amount to the person named in the cheque. What is an Order Cheque? The system of crossing cheque arose by mercantile usage and was later on sanctioned by law. Then where it says 'Pay' write the name of the person or company to whom you wish to pay. This provides a level of security to the payer, as it requires the funds be handled through a collecting banker. It indicates the payment to the particular person only through bank account. After expiry of that period, no payment will be made by banks against that cheque. In an open check the person whose name appears on the check can write the name of another person on it, and can get the cash.
While the precise formatting and wording may vary between nations, the most common symbolic market involves two parallel lines being drawn. For Example, a cheque issued on 10th Jan 2010 may bear a date 20th Dec 2009. In general, issuing of cash cheques is not encouraged as they are exposed to risk of fraud. By inter-bank agreement, the marking of cheque have been stopped. A check that bounces means that the bank of the person who wrote the check refuse to transfer the funds to the person attempting to cash or deposit the check.
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. Open checks can be either a bearer or order checks. This is a safer way of transferring money then an Uncrossed or open cheque. On on of these cheques there will be blank lines to fill in. Write the amount to be paid both in numbers and words It is advisable to write both the number value as well as value in words in the cheque. By using crossed checks, check writers can simply but effectively protect the they write.
Identification must be insisted on by the bank when encashing the order cheque for the presenter. The person to whom the cheque is issued is entitled to receive the sum mentioned in the cheque provided the account has sufficient balance from the bank where the cheque … issuer holds his account. A crossed cheque can only be cashed through a bank of which the payee of the cheque is a customer. The bank will ask proof of identity from the person cashing it to ensure that they are paying the correct person to whom the cheque was issued to Crossed cheque - A crossed cheque is also called an account payee cheque. Your bank then pays the money to that person payee from your account.