A cheque is a negotiable financial instrument
we use to settle payments. A cheque can be lost, stolen or the signature of
payee can be done by someone else pretending him/her and that’s why the
protection of cheques has increased according to an international standard that
we must thoroughly consider when writing a cheque.
Crossing is a popular method of protecting
the payer and payee of a cheque. Both bearer and order cheques can be crossed. It
prevents fraud and wrong payments. Basically a crossing can be done by "Drawing
Two Parallel Lines" across the face of the cheque. Crossed cheques cannot
be paid at the counter and they must be presented through the bank only.
General Crossing:-
- Two parallel lines, drawn across the face of the cheque
- An abbreviation "& Co." has written between the two parallel lines
- "Not Negotiable" has written between the two parallel lines
- The cheque bears the words "A/c. Payee" between the two parallel lines.
A crossed cheque can be made bearer
cheque by cancelling the crossing and writing ‘Pay Cash’ with the full
signature of drawer. This operation is called "opening the crossing”.
Special or Restrictive Crossing:-
Whenever a particular bank's name has
written in between the two parallel lines the cheque is said to be specially
crossed.
In addition to the mentioning of a bank’s name, the words
"A/c. Payee Only", "Not Negotiable" may also can
be seen. The effect of special crossing is that the bank makes payment only to
the banker whose name is written in the crossing. Specially crossed cheques are
much safer than generally crossed cheques.
