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.
Different Types of Crossing
1. Two parallel lines, drawn across the face of the cheque
2. An abbreviation “& Co.” has written between the two parallel lines
3. “Not Negotiable” has written between the two parallel lines
4. 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”.
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.