Why is cheque crossed

A cheque which has no crossing at all is called an open cheque. Customers who specifically request a chequebook with open cheques may have their own good reasons for doing so, but their bank will explain the possible risks.

It cannot be cashed over the counter by the payee; it must be paid into an account in the same name as that appearing in the payee line of the cheque. Not where the cheque is crossed. Any alteration or attempt at alteration of the crossing would be treated with caution by a bank as it could be a fraudulent. Section 77 2 of the Bills of Exchange Act specifically allows both the receiver i.

Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. Your Money. Personal Finance. Your Practice. Popular Courses. Banking Checking Accounts. What Is a Crossed Check? Key Takeaways A crossed check is a check that is crossed with two parallel lines, either through the top left-hand corner of the check or horizontally across the whole check.

Crossing a check provides specific instructions to a financial institution regarding how the funds can be handled. Crossed checks are predominantly used in countries across Europe and Asia, as well as Mexico and Australia. Related Terms Understanding Checks A check is a written, dated, and signed instrument that contains an unconditional order directing a bank to pay a definite sum of money to a payee.

Section defines it as a crossed cheque with two parallel transverse lines at its top left-hand corner. Therefore, money can encash by a particular bank. It is highly secured. A cheque with two special crossings is Double Crossing. Further, if the banker in whose favour the cheque is made does not have a branch where the cheque is. The second bank serves as an agent of the first collecting banker. Cross the cheque appropriately.

The way a cheque is crossed specified the banker on how the funds are to be handled, to protect it from fraud and forgery. Primarily, it ensures that the funds must be transferred to the bank account only and not to encash it right away upon the receipt of the cheque. There are several types of crossing.