Cross Cheque and its Types

Last Updated at: August 06, 2020
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Cross Cheque and its types

The method refers to the Cross of Cheques (Cross Cheque) that defines the general guidance to a cheque. This is about to be the transfer of the bank account. According to Section 123 of the Negotiable Instruments Act, 1881 regarding Crossing of Cheques, the guidance declared defines that the amount defined in the cheque will be transferred directly into the account of the cheque holder and will not be directly delivered as cash to the owner over the bank counter. Let us have a brief discussion about the cross cheque and its types.

Types of Cross Cheque

General Crossing

General cross cheque

According to Section 123, the common crossing of cheques means including some words in connecting the two lines drawn which signifies a crossed cheque. This represents that the bank on which it is drawn shall not allow the amount of return in any other banks. Therefore, the payment can be only in the collecting bank.

Special or Restricted Crossing

Special or Restricted Crossing (Section 124)

According to Section 124 in the case of special or restricted crossing, the cheque carries the name of the bank, both with or without the words ‘not transferable’. This indicates that the payment can be only to that particular bank.

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Not negotiable crossing (Section 130)

Not negotiable crossing (Section 130)

According to Section 130, this type of cheque crossing indicates that the cheque can be given but cannot have a transaction. In such instances, the ‘cheque holder’ will have the title of a transferor alone.

Amount Payee Crossing

Amount Payee Crossing

Amount payee crossing term represents that the amount cannot be returned in any other bank account. This is apart from the one stipulated in the cheque. Practising amount payee crossing also assures that the money is given to the bank account only and is not given in the form of liquid cash.

Cheque Validity

The validity of a cheque has to be within three months from the date on which it has its representation. After this session, it becomes old, and it may appear in the drawee bank declining to pay the amount. But still, if the cheque has become out-of-date due to the expiry of the period of efficacy, then it can be re-validated by the drawer.

Reasons to Cross Cheque

  • Crossing a Cheque gives specific directions to financial planning structure regarding the handling of funds.
  • Moreover, cross cheques normally have identification by drawing either two parallel intersecting lines. It is either vertically across the cheque or on the top left-hand corner of the cheque.
  • Two or more messages like ‘and company’ or ‘not negotiable’ may be fixed within the lines. Moreover, while just drawing the lines with no words also would not alter the purpose of the crossed cheque.
  • Additionally, with Cross cheques, the cheque representatives may preserve the amount transfer. Further, it may be from being drawn by the unofficial person or from being taken.
  • This composition for crossed cheques may vary among various nations like its format or observations.
  • Therefore, cross cheques can only have payment over a bank account. The recipient’s transaction record can discover later for additional queries and explanations.

 

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Cross Cheque and its Types

947

The method refers to the Cross of Cheques (Cross Cheque) that defines the general guidance to a cheque. This is about to be the transfer of the bank account. According to Section 123 of the Negotiable Instruments Act, 1881 regarding Crossing of Cheques, the guidance declared defines that the amount defined in the cheque will be transferred directly into the account of the cheque holder and will not be directly delivered as cash to the owner over the bank counter. Let us have a brief discussion about the cross cheque and its types.

Types of Cross Cheque

General Crossing

General cross cheque

According to Section 123, the common crossing of cheques means including some words in connecting the two lines drawn which signifies a crossed cheque. This represents that the bank on which it is drawn shall not allow the amount of return in any other banks. Therefore, the payment can be only in the collecting bank.

Special or Restricted Crossing

Special or Restricted Crossing (Section 124)

According to Section 124 in the case of special or restricted crossing, the cheque carries the name of the bank, both with or without the words ‘not transferable’. This indicates that the payment can be only to that particular bank.

Get legal advice  

Not negotiable crossing (Section 130)

Not negotiable crossing (Section 130)

According to Section 130, this type of cheque crossing indicates that the cheque can be given but cannot have a transaction. In such instances, the ‘cheque holder’ will have the title of a transferor alone.

Amount Payee Crossing

Amount Payee Crossing

Amount payee crossing term represents that the amount cannot be returned in any other bank account. This is apart from the one stipulated in the cheque. Practising amount payee crossing also assures that the money is given to the bank account only and is not given in the form of liquid cash.

Cheque Validity

The validity of a cheque has to be within three months from the date on which it has its representation. After this session, it becomes old, and it may appear in the drawee bank declining to pay the amount. But still, if the cheque has become out-of-date due to the expiry of the period of efficacy, then it can be re-validated by the drawer.

Reasons to Cross Cheque

  • Crossing a Cheque gives specific directions to financial planning structure regarding the handling of funds.
  • Moreover, cross cheques normally have identification by drawing either two parallel intersecting lines. It is either vertically across the cheque or on the top left-hand corner of the cheque.
  • Two or more messages like ‘and company’ or ‘not negotiable’ may be fixed within the lines. Moreover, while just drawing the lines with no words also would not alter the purpose of the crossed cheque.
  • Additionally, with Cross cheques, the cheque representatives may preserve the amount transfer. Further, it may be from being drawn by the unofficial person or from being taken.
  • This composition for crossed cheques may vary among various nations like its format or observations.
  • Therefore, cross cheques can only have payment over a bank account. The recipient’s transaction record can discover later for additional queries and explanations.

 

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