CHEQUE AND ITS DIFFERENT TYPES

DEFINITION OF CHEQUE :

Cheque is a negotiable instrument in which there is an unconditional order to the bank is made for the payment of a certain amount to the payee and signed by the drawer.

It can be easily transferred through mere hand delivery. There are three parties to the cheque- Drawer (maker of the cheque), Drawee (bank on which the cheque is drawn), Payee (to whom the amount of the cheque is payable).

TYPES OF CHEQUE

  • Bearer Cheque  :  The cheque in which the payment is made to any person who presents the cheque to the bank.
  • Order Cheque  : The cheque in which the payment is made only to the person whose name is specified in the cheque.
  • Crossed Cheque : Crossed cheque means that the two transverse parallel lines are made on the face of the cheque, to give a better title to the holder of the cheque is known as Crossed Cheque. Such a type of cheque can only be transferred to the payee’s account.
  • Uncrossed Cheque :Uncrossed cheque is a kind of cheque which is made payable at the time of presenting it.
  • Stale Cheque : The type of cheque, which is presented after the specified time of three months is a stale cheque.

 

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