What Do You Mean By Crossing Of Cheques And Its Importance?

A crossed cheque will ensure security to the person who writes the cheque out, and can only be deposited into the payee's account. The cheque cannot be cashed straight away at any counter of a bank. Crossing a cheque will effectively protect it from being cashed or stolen. Two transverse parallel lines are generally drawn on the top left-hand corner of a cheque. There are different types of crossing:

• A cheque that is crossed generally

This is when 'and company' is added between the two transverse parallel lines, or when the two transverse parallel lines has the wording 'Not Negotiable' between them. Alternatively, there could be no wording between the two transverse parallel lines.

• A cheque that is crossed specially

This is when a banker's name is added, either with the wording 'Not Negotiable' or without.

• Restrictive crossing or Account Payee

The wording 'Account Payee' can be added in both the special and general crossing. With this kind of crossing the bank credits the cheque amount to the payee's account only. The cheque will remain transferable but the collecting banker's liability will be enhanced in case the proceeds of a cheque that is crossed like this is credited by him to a person who is not the payee and that the endorsement that is in favour of the payee is proven to be forged. The collecting banker has to make appropriate enquiries with regards the last endorsee's title from the original payee that is named on the cheque.

• Not Negotiable crossing

The wording 'Not Negotiable' can also be added to Special and General crossing. This will remove the most important characteristics of any negotiable instrument. This means that the transferee of this type of crossed cheque cannot ultimately become the holder and will not be able to put across a better title to their own transferee, even though the instrument will remain transferable.

Crossing of a cheque means that the cheque is payable only through a collecting bank. Therefor it is not payable at the counter of any bank.

Crossing of cheque ensures security to the holder because only the collecting banker can credit the proceeds to the account of the payee.

There are different types of crossing, for instance:

• General Crossing
• Special Crossing
• Non negotiable Crossing
• Restrictive Crossing
  

When you issue a cheque on payee name, and crossing one or two line top of the corner, its means you are giving authority to only payee person can collect the amount. No one else. 

Crossed cheque is nothing but an account payee check.
Account payee means that the person whose name is on the cheque must have an account to encash it.

Crossing of cheque simply means to gave additional protection to the payee
if a cheque is to be crossed ,the sum of that cheque can only recoverd from a specified banker
and it will be credited to the holders account so simply it prohibits collection of cheque through the counters