Different Type of Cheques Issued in India

Keywords: Cheques, Types of Cheques, Types of Cheques Bankers Adda

» A cheque (or check in American English) is a document that orders a bank to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued.

» The person writing the cheque, the drawer, has a transaction banking account (often called a current, cheque, chequing or checking account) where their money is held. The drawer writes the various details including the monetary amount, date, and a payee on the cheque, and signs it, ordering their bank, known as the drawee, to pay that person or company the amount of money stated.

» Before proceeding further, first let us understand the parties involved in cheque transactions. There are mainly three parties involved in cheque transactions and are as below.

1) Drawer- He is a person who holds the account and has written and signing authority on cheque. Therefore, he issues cheques of his bank account. He is directing banks to pay a certain amount of money to the certain person or to the bearer of the cheque. Therefore, in simple words, you may say that a person who holds the bank account and who sign on cheque is called the drawer.

2) Drawee-Drawee is a party upon whom the cheque is written. The drawee is your bank. So drawer is giving instruction to drawee to pay an amount mentioned on the checque to the person named or to the bearer of the cheque. When your bank follows the instruction and pay the cash to the person whose name mentioned on cheque or to the bearer of cheque then it is called as “cheque is honored”. If payment not done, then it is called “cheque dishonored”.

3) Payee- He is a person to whom the payment will be made. His name will be mentioned on cheque, so he is an authorized person to receive cash. So if drawer himself need to withdraw cash from his account using cheque then he need to write as SELF in the payable field of the cheque. In such case drawer himself becomes payee.

Types of Cheques

  1. Bearer Cheque
  2. Order Cheque
  3. Crossed Cheque
  4. Account Payee Cheque
  5. Crossed Cheque
  6. Stale Cheque
  7. Post Dated Cheque
  8. Anti Dated Cheque
  9. Open Cheque
  10. Gift Cheque
  11. Traveller’s Cheque
  12. Multilated Cheque

Bearer Cheque

A cheque which is payable to a person whosoever bears, is called bearer cheque.. These types of cheques normally used for cash transaction. As the bearer cheque is payable to the person specified therein or to any other else who presents it to the bank for payment, such cheques are risky, this is because if such cheques are lost, the finder of the cheque can collect payment from the bank.

Order Cheque

A cheque which is payable to a particular person or his order is called an order cheque. Identification must be insisted on by the bank when encashing the order cheque for the presenter. The ID number and the named payee’s signature will be asked for on the back of the cheque.

Crossed Cheque

A cheque which carries too parallel transverse lines across the face of the cheque with or without the words “I and co” or "Account Payee" or "Not Negotiable" is said to be crossed. A crossed cheque cannot be encashed at the cash counter of a bank but it can only be credited to the payee's account.

Account Payee Cheques

When two parallel lines along with a crossed made on the cheque and the word 'ACCOUNT PAYEE' written between these lines, then that types of cheques are called account payee cheque. The payment of the account payee cheque taken place on the person, firm or company on which name the cheque issue.

Company Crossed Cheques

When two parallel lines along with a crossed made on the cheque and the word 'COMPANY' written between these lines, then that types of cheques are called company crossed cheques. Then type of withdrawn does not taken in cash while the person on which the cheque issue, transferred on its account. Normally crossed cheque and company crossed cheque are same.

Stale Cheques

Stale check is a check that is presented to be cashed or deposited at a bank six months or more after the date it was written. The date when the check is presented to be cashed or deposited in a bank account is known as the payment date. A stale cheque is not honoured by the bank.

Post Dated Cheques

In banking, post-dated cheque is a cheque written by the drawer (payer) for a date in the future. The amount of the check will not be drawn from the account until the date written on the check.

Anti Dated Cheques

If a cheque bears a date earlier than the date on which it is presented to the bank, it is called as "anti-dated cheque". Such a cheque is valid upto three months from the date of the cheque.

Open Cheque

A cheque is called open when it is possible to get cash over the counter at the bank. The holder of an open cheque can receive payment over the counter at the bank, deposit the cheque in his own account or pass it to someone else by signing on the back of a cheque.

Gift Cheque

Gift cheque, it is a cheque forirted in decorative form issued for a small extra charge by the banks for use by customers who wish to give presents of money on special occasions. Gift cheques may be purchased in unlimited numbers from every branch of the ‘X’ Bank.

Traveller’s Cheque

A traveler's cheque is a medium of exchange that can be used in place of hard currency. ... They were generally used by people on vacation in foreign countries instead of cash, as many businesses used to accept traveler's cheques as currency.

Multilated Cheque

If a cheque is torn into two or more pieces such cheque is Mutilated Cheque. If it presented for payment, such a cheque the bank will not make payment against such a cheque without getting confirmation of the drawer. In case, if a cheque is torn at the corners and no material fact is erased or cancelled, the bank may make payment against such a cheque.

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