Quick Answer: Is It Mandatory To Cross The Cheque?

Who can make crossing of the Cheque Is it mandatory to crossed the Cheque?

Section 124 of The Negotiable Instruments Act, 1881 defines Special Crossing as: “Where a cheque bears across its face an addition of the name of a banker, either with or without the words “not negotiable”, that in addition shall be deemed a crossing, and the cheque shall be deemed to be crossed specially and to be ….

Who Cannot cross a Cheque?

Where the Cheque is uncrossed, the holder may cross it generally or specially. Where it is crossed generally, he may cross it specially. Where it is crossed generally or specially he may add the words ” Not Negotiable”.

Why are Cheques double crossed?

Thus, a cheque doubly crossed shall be payed by the banker when the second banker is acting only as the agent of the first collecting banker and this has been made clear on the Cheque, i.e., crossing must specify that the banker to whom it has been specially crossed again shall act as the agent of the first banker for …

What is the purpose of cross 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).

Can Cheque be deposited in any bank?

When a bank customer deposits a cheque, which may be drawn on any bank, the bank would credit the depositor’s account with the amount of the cheque. … All banks might have clerks to take cheques drawn on other banks to those banks, and wait for payment.

When a bank returns a Cheque unpaid it is called?

When a Bank returns a cheque unpaid, it is called: a) Dishonor of the Cheque.

What happens if a Cheque is post dated?

A “post- dated cheque” is only a bill of exchange when it is written or drawn, it becomes a “cheque” when it is payable on demand. … As a bill of exchange a post-dated cheque remains negotiable but it will not become a “cheque” till the date when it becomes “payable on demand”.

What happens if a crossed Cheque is presented for payment Mcq?

When a customer draws a cheque on a bank, it is a mandate on that bank to pay. 3. What happens if a crossed cheque is presented for payment? A crossed cheque is a cheque that has been marked to specify an instruction about the way it is to be redeemed.

What happens if you don’t cross your Cheque?

If a cheque is not crossed, a person can receive payment in cash across the counter. Suggestion: Always cross your cheques unless the person you are paying asks for a “cash” cheque, or if the person does not have a bank account.

Which is the safest form of crossing?

Explanation: In Account payee crossing the amount will not be paid to anybody over the counter. It will be credited to the account of the payee only. Thus account payee crossing ensures safe transfer of funds.

What is not negotiable crossing of Cheque?

Not Negotiable Cheque Crossing It is when the words ‘Not Negotiable’ are written between the two parallel transverse lines across the face of the cheque in the case of general crossing or in the case of special crossing along with the name of a banker.

Is it necessary to cross 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 the difference between a cross Cheque and an open Cheque?

A crossed cheque is a cheque that has been marked to specify an instruction about the way it is to be redeemed. … An open cheque means the cheque can be deposited in the bank account only. A crossed cheque can only be cashed through a bank of which the payee of the cheque is a customer.

Who is given protection only when he collects a crossed Cheque?

Statutory protection to collecting banker: A collecting banker is protected against the risk of conversion as follows according to section 131 a banker who has in good faith and without negligence received payment for customer of a cheque crossed generally or specially to himself shall not, in case the title to the …

Who is Authorised to cross a Cheque?

125 of the NI Act, the following people, apart from the drawer, are authorized to cross a cheque: The holder of a cheque is authorized to cross a cheque, either generally or specially, if the same is uncrossed. He is also entitled to cross a cheque specially if the same has been crossed generally.

What are the advantages of crossed Cheque?

The benefits of a crossed cheque is as follows: Crossing of a cheque makes it difficult for a wrong person to get payment of the cheque. This is because, crossing is a direction to the paying banker to pay the amount mentioned in the cheque to the account of the payee and not across the counter.

What does cross a Cheque mean?

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. This double-line notation signifies that the check may only be deposited directly into a bank account.

Can you withdraw cash from Cheque?

Go to any branch (in the city) of the bank that the cheque belongs to. Present it for clearance. The bank teller, will verify the details on the cheque and clear it. The cheque will be cleared then and there and you will get the cash.

What is the validity of Cheque?

Revised validity period of Cheques, Drafts, Pay Orders & Banker’s Cheques. As per RBI guidelines, with effect from April 1, 2012, the validity period of Cheques, Demand Drafts, Pay Orders and Banker’s Cheques will be reduced from 6 months to 3 months, from the date of issue of the instrument.

Which Cheque is the safest?

Cashier’s checks are generally regarded as the safer bet since the funds are drawn against the bank’s account, not an individual person’s or business’s account.