Different types of cheque crossover in the banking sector and their effect: Cheques are a negotiable instrument. A person issues the cheque to make a payment to an intended person, but the cheque can be lost or stolen if it falls into the wrong hands. So to add some security to limit how it can be cashed, the drawer marks certain types of intersections on the check. Crossroads protect the drawer and the payee and prevent false payments and fraud. In our last article, we read what a check is and different types of controls such as order control, bearer control, clearing check, obsolete check, etc. Now here in this article we are going to read about different types of crosses on checks. Generally, interest-bearing cheques can only be deposited into a bank account[4] so that the beneficiary can be located. [5] [ref. necessary] The failure of a bank to comply with intersections constitutes a breach of contract with its customer. The bank may not be able to debit the drawer`s account and may be liable to the true owner for their loss. [ref. needed] In case of general crossing of the check, the paying banker pays money to each banker. For the general intersection, two parallel transverse lines are required at the corner of the check.

However, at special intersections, two parallel transverse lines are not absolutely necessary, but the name of the banker is the most important. There are also significant differences between the particular and general crossing of controls. Although the inclusion of the banker`s name is indispensable at a particular intersection, the need for a general passage is to draw two parallel lines. The special crossing of a cheque means that the paying banker only has to cash the cheque if it is presented to him by the bank named in passing. No other person can receive the cheque. A bearer cheque with a general cross stating „non-negotiable” is stolen. Eventually, he comes into possession of Aman, who takes him in good faith and for value. Aman then picks up the cheque through his bank. He receives the amount and the paying banker also pays the amount.

Is Aman a timely owner? Explain why. In the transition of general control, the crossing is done by drawing two parallel transverse lines through the control. Words such as „and Co.”, „& Co.”, „non-negotiable” can also be added to an expired cheque. This passage is also called Banker`s Crossing, where it becomes obvious that the checks were only issued to pay a bank. Therefore, the paying banker credits the amount directly to the receiving banker. The bank makes payments only to bankers whose name of the bank is written in a special intersection. A cheque is a negotiable instrument used in money transfers and also serves as proof of identity. A cheque may be presented as crossed out or opened. The open check is also known as a bearer check and is used for over-the-counter transactions. A spent cheque is used as proof of identity and cannot be used at the ATM for transactions. Cross-referencing can be done in different ways that have different effects.

The effects of crossing different types of controls are explained — There may be two special passages. In this collector banker, add an extra cross and write the name of another bank that acts as their agent in collecting checks. It allows other banks to collect the amount on their behalf. The words „non-negotiable” may be added to an intersection. Such a crossing has the effect of removing the most important feature of a negotiable instrument (as defined in § 123). Here are different types of crossings and their effects; There are serious risks associated with paying the wrong person. These risks can be avoided by giving the paying banker a clear instruction on who the cheque should be paid to by indicating certain words on the cheque itself. It is the crossing of a cheque. „The passage is an instruction to the paying banker to pay the amount of the cheque only through a banker and not directly to the person who presents it at the counter.” The Negotiable Instruments Act 1881 sets out in sections 123 to 131 the provisions governing the passing of controls. Let`s familiarize ourselves with the types of cheque crossings in more detail. A banker cannot debit his client`s account without complying with the cheque passage.

A cheque is a negotiable instrument. It can be opened or crossed. An open cheque is the bearer`s cheque. It is payable at the counter when the beneficiary presents it to the paying banker. An interest-bearing cheque is not payable at the counter, but is only collected through a banker. The amount payable for the cheque struck is transferred to the beneficiary`s bank account. Types of crossings include general crossing, special crossing and restrictive crossing. Learn more about exchanging cheques. Section 124 of the Negotiable Instruments Act, 1881 defines the special passage as follows: „If a cheque bears on the front an addition to the name of a banker, with or without the words `non-exchangeable`, this shall also be considered a passage, and the cheque shall be deemed to have been specially crossed and given to that banker.” The effect of the non-negotiable passage is that the cheque has lost its essential characteristic of a „negotiable instrument”.

The purchaser of such a deductible cheque cannot obtain a better security than that of the transferor (cannot become the holder in due time) and cannot transfer a better security to its own purchaser, but the instrument remains transferable. Cheque writing is a technique used to indicate that the underlying amount should be paid to the banker and not at the counter. Crossing a cheque ensures that payment is only made to that account. There are certain fixed words that can be added to the cheque crossing to ensure that the payment is made to the banker and that the instrument is not negotiable for other purposes. Words such as „NON-NEGOTIABLE”, „ACCOUNT RECIPIENT ONLY” may be used to confirm such transactions. An elapsed check ensures the protection of the cheque holder. In this case, the paying banker pays the amount of the cheque only to the banker whose name appears at the intersection or to his collection agent. This type of crossing limits the negotiability of the cheque. It asks the collecting banker to credit the amount of the cheque only to the account of the beneficiary, the designated party or his agent. This crossover prevents the collecting banker from making the payment to the account of the beneficiary named on the check.

If the banker credits the amount to a third party other than the beneficiary, he is responsible for all losses incurred by the drawer or beneficiary. In accordance with Article 126 of the Law on Negotiable Instruments, the paying banker is obliged to make the payment on a clearing cheque in accordance with the conditions of the changeover. This was also stipulated in section 126 of the Negotiable Instruments Act, which states that the cheque must have the banker`s name added to the front, with or without the words „non-exchangeable”. Adding a cross to a cheque increases its security because it cannot be cashed at a bank machine, but must be deposited into an account that has exactly the name on the „payee” line of the cheque (i.e. the person who received the cheque who is legally the „beneficiary” and „holder” of the cheque). Draftsman write the word „Non-negotiable” in the intersection. Thus, the paying banker will only cash the check if it is ordered through the bank mentioned in passing or its bank agent. If a banker does not follow the instructions or passages marked by the check drawer, this constitutes a breach of contract between the bank and its client. Section 123 of the Negotiable Instruments Act deals with the general crossing of cheques. A cheque is generally considered crossed out in the following cases: However, there are exceptions to clearing cheques of various types.

A crossed out bearer check can be negotiated by delivery and an order check sold by note and delivery. Section 130 of the Negotiable Instruments Act, which deals with non-negotiable transgression, states that „a person who accepts a cheque that is generally or specifically crossed out and in both cases is marked `non-negotiable` has no better title to the cheque and cannot confer on it a better title than the person: hence she took it. Non-negotiable crossing does not mean that the cheque is not transferable. Under section 130 of the Negotiable Instruments Act, 1881, a person who accepts a cheque bearing a general or special cross marked „non-exchangeable” has no better title than that of the person from whom he took it, nor is he able to give a better title than that of the person, hence she took it. Effect: Non-negotiable crossing removes the negotiable title from a cheque. The acquirer may not use the title of cheque holder while the instrument is still transferable. This crossing does not affect the portability of the cheque. This means that the person who carries a non-negotiable cheque will not be able to give the cheque a better title than the person who owned it before.