Question

What do you understand by crossing of cheque? Write the types of it.

Hint:

Always cross a cheque and add "Account Payee" for added security.

Answer 1

Step 1: Understanding Crossing of Cheque Crossing of a cheque involves drawing two parallel lines across the face of the cheque, typically with the words "Account Payee" or "Not Negotiable," or the name of a bank. This instructs the paying bank to deposit the cheque into the payee's account rather than paying cash over the counter, reducing the risk of theft or fraud.
Step 2: Types of Crossing
- General Crossing: Two parallel lines are drawn with or without the words "Account Payee" or "Not Negotiable." The cheque can be deposited into any bank account, but cash payment is restricted.
- Special Crossing: Two parallel lines are drawn with the name of a specific bank (e.g., "State Bank of India") written between them. The cheque must be paid only through the named bank, adding an extra layer of security.

Step 3: Purpose and Importance Crossing ensures safer transactions by limiting negotiability and protecting the payee, making it a key feature in modern banking.