Crossing of Cheque, General Crossing and types

Crossing of Cheque, General Crossing

1. General Crossing

2. CROSSED CHEQUE Amount is not paid directly at the counter of the bank. Crossing ensures security to the holder of the cheque Amount is paid into the bank account of a person

3. 1. GENERAL CROSSING A cheque crossed generally is: a cheque that bears two parallel transverse lines across its face, optionally with the words 'and company' (or any abbreviation thereof) or 'not negotiable' or ‘account payee’ between the lines.

4. ‘AND COMPANY’ or ‘& Co’ – name of collecting banker/ payee’s banker is not known ‘not negotiable’ - a message to the transferee that he will not get a better title than that of the transferor ‘Account payee' – a message to the collecting banker that the proceeds of the cheque goes into the hands of the payee only.

5. ESSENTIALS OF GENERAL CROSSING Two lines are compulsory Lines must be drawn parallel and transverse Lines – drawn on top left hand corner The words 'and company' or 'not negotiable‘ are not compulsory

6. ADVANTAGES OF GENERAL CROSSING It ensures protection of the cheque It gives direction to the paying banker – To pay amount through an account and not at the counter

7. 4. If a crossed cheque is paid at the counter – - the paying banker will lose his statutory protection - the paying banker will be liable to drawer ( and true owner ) for any loss