Cross Cheque Payment Rule: Almost everyone does banking, but very few people use cheques. Even among them, there are many people who use cheques sometimes. Most people are not even aware of the different types of cheques. One of the many types of cheques is a cross cheque,
under which two parallel lines are drawn on the upper left corner of the cheque. Only a few people know when and why these lines are drawn. Let us know every detail of a cross cheque i.e. a cheque with two lines drawn on the corner, as per the Negotiable Instruments Act 1881.
No one can withdraw cash from this
According to section 123 of the Negotiable Instruments Act 1881, the person issuing the cheque tells the bank that it is a cross cheque through the two lines drawn on the left corner of the cheque. The special thing about this cheque is that you cannot go to any bank and withdraw cash from it.
Payment is made only in the account
Crossing a cheque ensures that the payment will be made only in the bank account. This payment can be made to the person whose name is written on the cheque. Or that person can also endorse the cheque to someone, for which it becomes necessary for him to sign on the back of the cheque.
General Crossing
There are many types of cross cheques. The first is general crossing, in which two lines are drawn on the edge of the cheque. Whatever we have discussed about cross cheques so far comes under general crossing.
Special Crossing?
According to section 124 of the Negotiable Instruments Act 1881, special crossing is done when the person issuing the cheque wants that the money to be paid to the person should go to his account in a particular bank. Suppose the person to whom the money is to be paid has accounts in many banks.
In such a situation, the person issuing the cheque can draw two parallel lines in the blank space at the bottom of the cheque and write the name of the bank. In such a situation, money can be deposited through that cheque only in the account of that bank whose name is written on the cheque.
Account Payee Crossing
If Account Payee (A/C Payee) is written between the crossing lines in the cheque, it means that only the person whose name is written on the cheque can take money in his account. He can withdraw money by depositing the cheque in any bank account. However, if the name of a bank is written while doing special crossing, then the money will go only to that bank.
The most special thing about this cheque is that it cannot be endorsed by anyone. Its money will go only to the account of the person whose name is written on the cheque. Let us tell you that there is no mention of this in the Negotiable Instruments Act 1881, but many banks follow this practice. It is also mentioned on the website of HDFC Bank.
Why are cross cheques issued?
The purpose of issuing a cross cheque is only that the amount of the cheque should go to the person to whom the cheque issuer wants to give it. In such a situation, even if the cheque falls into the wrong hands, he will not be able to withdraw money from it. That is, crossing the cheque increases its security.