Crossing of Cheques
What is Crossing of a Cheque?
Crossing of a cheque involves drawing two parallel lines, usually across the top left corner, with or without additional wording. It acts as an instruction to the bank (drawee) on how the cheque should be managed. Unlike uncrossed cheques that can be cashed over the counter, crossed cheques can only be deposited into a bank account. This significantly reduces the risk of someone misusing a lost or stolen cheque.
What is Crossing and Bouncing of Cheques?
Crossing and Bouncing of Cheques both are separate concept. Bouncing of Cheques is also known as a dishonored cheque. A bounced cheque occurs when the drawer’s account does not have sufficient funds to cover the amount of the cheque whereas in cheque crossing, the purpose is not to control availability of funds but limit how cheque can be used.
How Many Types of Crossing Cheque?
There are four types of cheque crossings are: General Crossing, Special Crossing, Account Payee Crossing, and Not Negotiable Crossing.
Can Cheque Be Deposited in any Bank?
It all depends on the type of the crossing. Uncrossed cheques can be deposited in any bank. On the other hand, parties must usually deposit crossed cheques into their own banks or the bank specified within a special crossing.