Crossing of Cheques Banking

Types of Cheque Crossing
Tanaya Ketkar
FYBCOM Batch 2
Roll no-265
Introduction
•In the business world negotiable instruments are important
instruments of credit. Negotiable instruments like cheque,
bills of exchange and promissory notes play an important
role for making payments and discharging business
obligation. A negotiable instrument is a transferable
document. In India the transactions relating to negotiable
instruments are governed by the negotiable instruments act
1881. Bank collect bills of exchange and engage in purchase
and discount of the cheques and bills or make advances
against them. A trader can issue any of the negotiable
instruments to another trader who may get the amount
collected through the bank.
This Photo by Unknown Author is licensed under CC BY-SA
CHEQUES
-A check is bill of exchange drawn on specific banker and not expressed to be payable otherwise
on demand (section 6, negotiable instruments act). In other words, it is a bill drawn on a banker
which is payable on demand. A cheque is always drawn on a particular banker.
-Like a bill of exchange, a cheque has 3 parties drawer, drawee and pay. But drawee is always a
banker.
-A check is unconditional order on the specified banker to pay on demand, asserted an amount of
money to the bearer of the cheque or to his order. A cheque does not require an acceptance on
dishonor of the cheque: the holder has no remedy against the banker. All cheque are bill of
exchange hey but not all bill of exchanges are cheques. As pour the definition of bill of exchange,
it can be stated that a cheque is an instrument in writing containing an unconditional order
signed by the maker (drawer) directing a specific banker (drawee) 2 pay on demand a certain
sum only to or to the order of certain person OR to the bearer of the instrument
Characteristics of cheques
1. Instrument in writing: text are handwritten, typed, or printed are legally valid. In the practice banks do not pay
cheques return pencil because alterations can be made hey checks written with ballpoint pens however are honored
by the bank.
2. Unconditional order: a cheque must contain an unconditional order it is not necessary that the word order or its
equivalent be used in the cheque. A cheque should be drawn on bank and not on any other person.
3. Drawn on a specified banker only: a cheque should be drawn on a specified banker. For this purpose, each office of a
bank is treated as a banker. Or cheque should be drawn on bank and not on any other person.
4. Specified sum of money: a cheque is an order to pay some of money .The sum of money to be paid must be certain.
The act does not mention whether the amount should be stated in words and /or figures but the printed cheque
forms supplied by the bank to their customers provide for amount being expressed in words and in figures also.
5. Specimen signature: the signature of the customer on the cheque tallies with specimen signature of the same
customer as kept in records of the bank
6. Payable on demand: a cheque is intended for speedy payment it must be an order to pay certain sum of money on
demand it is not necessary that the words on demand should be used as when drawer of an instrument asks the
drawee to pay and does not specify the time for its payment under section 19 of the negotiable instruments act
cheque is payable on demand.
Types of cheques:
1.Bearer cheque
2.Order cheque
3.Crossed cheque
Some other types of cheques are :
1.Ante dated 2.Post dated 3.Stale 4.M.I.C.R

cheque cheque cheque cheque
5.Blank 6.Counter 7.Mutilated 8.Open

9.Gift 10.Traveller's 11.Self 12.Banker's

Crossing of cheques
•Cross cheque is a cheque that has been marked to specify and
instruction about the way it is to be redeemed. A common
instruction is to specify that it must be deposited directly into the
account with bank and not immediately cashed by bank over the
counter. Across cheque is a cheque that is payable only through
collecting banker and not directly at the counter of the bank.
Crossing ensures the security to the holder of the cheque as only
the collecting banker credits the proceed to accounts of the pay of
the cheque
•the various types of crossing are:

• general crossing
• special crossing
• restrictive crossing
• .not negotiable crossing
• double crossing
General and special crossing:
General crossing when a cheque bears across its face and additional
of words ‘and company’ or any abbreviation thereof between 2
parallel transverse lines or of 2 parallel transfer lines simply either
with or without the words not negotiable that additional shall we
deemed as a crossing and the cheque shall be deemed as crossed
generally.
Special crossing
Where a check bears across its space, and addition of name of a
banker either with or without the words ‘not negotiable’ ,that
addition shall we deemed as a crossing and the cheque shall be
deemed as crossed specially and to be crossed to that banker
Restrictive and not negotiable crossing:
Restrictive crossing in addition to the above types of crossing

bankers offence speak of a type called restrictive crossing this is a
type developed by banking practice in this type the words ‘payee’s
account only’ or ‘account X’ only are added to the general or
special crossing. Restrictive crossing amounts to the direction to a
banker to credit the proceeds to the account of a pay
Not negotiable crossing:

the words’ not negotiable’ are written inside the general or
special crossing of a cheque .these words are in the crossing
are of great importance these words take away one of the
important characteristics of negotiable instruments .the
words’not negotiable’ on a cheque remove the negotiability of
the cheque
Double crossing:
When cheque bears 2 special crossings it is known as
double crossing
in this second bank acts as agent of the first collecting

bank
it is made when the banker in whose fever the cheque

is crossed does not have a branch where a check is
paid
Crossing of cheque enables a drawer to cross the
cheque genetically. Moreover, the drawer has the
independence to shift from general crossing to
special crossing. A banker also has the right to cross
an uncrossed cheque. This article has sufficiently
provided information regarding the crossing of
cheque, their types as well as their merits.

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Types of Cheque Crossing

1.Ante dated 2.Post dated 3.Stale 4.M.I.C.R

5.Blank 6.Counter 7.Mutilated 8.Open

9.Gift 10.Traveller's 11.Self 12.Banker's

•the various types of crossing are:

Restrictive crossing in addition to the above types of crossing

Not negotiable crossing:

in this second bank acts as agent of the first collecting

it is made when the banker in whose fever the cheque

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