Who can Cross a Cheque? has been discussed briefly in this article.
A cheque is nothing but a bill of exchange which is drawn upon a specified banker and payable on demand.
There are two types of cheques;
- Open Cheques
- Crossed Cheques
An open cheque is nothing but a cheque which is payable in cash across the counter of a bank.
A crossed cheque is a cheque in which two parallel transverse lines with or without the words “& Co.” are drawn and the payment of such cheques can be obtained only through a banker. Thus, crossing a cheque is a direction to the drawee banker so that the party who obtains the payment of the cheque can be easily traced.
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Who can Cross a Cheque?
Who can cross a cheque? A cheque can be crossed by the drawer, the holder and the banker;
1. Drawer – The drawer may cross the cheque generally or specifically.
2. Holder – When the cheque is uncrossed, the holder may cross it generally or specifically. Where the cheque is crossed generally, he may cross it specifically. And, where the cheque is crossed generally or specifically, he may add the words “Not Negotiable”.
3. Banker – Where a cheque is crossed specifically, the banker to whom the cheque is crossed may again cross the cheque specifically to another banker or his agent for collection.
Although, who can cross a cheque? the answer to this question is “the drawer, the holder and the banker can cross a cheque.
Types of Cross Cheque
Types of cross cheque have been discussed here. We have already seen who can cross a cheque? Now, we see that there are various ways to cross a cheque. Let’s discuss some of them;
- General Crossing Cheque
- Account Payee Crossing
- Special Crossing
- Not Negotiable Crossing
General Crossing Cheque
This type of crossing cheque needs two parallel transverse lines. There is no restriction to putting these parallel lines on a particular area on the cheque, but they could be drawn anywhere. Usually, it is advisable to put it on the top left of the cheque.
There is a usefulness of general crossing cheques in that the cheque needs to be essentially paid to the bank.
Account Payee Crossing
Account payee crossing is also known as a restrictive crossing. This kind of cheque has to comprise the words account payee or account payee only. The cheque needs to be crossed either generally or specially.
The importance of this type of crossing highlights that the cheque is not negotiable anymore.
The special crossing cheque does not need the name of the banker. The effect of this kind of crossing is that the cheque needs to be funded only to the banker that it has been crossed. It is a reminder to all of the people that a special crossing would not be changed into a general crossing.
Not Negotiable Crossing
In this kind of cheque crossing variety – the paper document needs to have the words not negotiable. Moreover, the cheque could be crossed specifically or generally. The cheque stays non-negotiable as well as the title of the transfer would not be better than the title of the transferor.
Rules of Crossing a Cheque
- A cheque can be crossed generally, may be crossed specially by the holder.
- The Cheque holder has the right to add the words “not negotiable” to it.
- When an uncrossed cheque or a crossed cheque generally is sent to a banker for the collection, the person may cross it specially to himself.
Frequently Asked Questions
Who can cross a cheque and cancel the cross of a cheque?
The payee can’t uncross a check, the payer can do so by writing “Crossing Canceled” across the front of the check.
What are the rules for crossing cheques?
1. A cheque can be crossed generally, may be crossed specially by the holder.
2. The Cheque holder has the right to add the words “not negotiable” to it.
3. When an uncrossed cheque or a crossed cheque generally is sent to a banker for the collection, the person may cross it specially to himself.
Who can Cross a Cheque? has been discussed briefly in this article. A cheque is nothing but a bill of exchange which is drawn upon a specified banker and payable on demand. There are two types of cheques; 1) Open Cheques and 2) Crossed Cheques.