Bearer Cheque vs Crossed Cheque

A bearer cheque is a type of cheque where the payment can be made to the person who presents the cheque to the bank without any identification. On the other hand, a crossed cheque is a type of cheque where two parallel lines are drawn on the top left-hand corner of the cheque, indicating that the payment can only be made through a bank account.

Crossing of Cheque

The crossing of a cheque means that the cheque can only be deposited into a bank account and not encashed. It is usually done by drawing two parallel lines on the top left-hand corner of the cheque. The crossing of a cheque provides a level of security and authentication for the payment. It also helps in preventing fraud and theft of the cheque.

Types of Crossing Cheque

1. General Crossing: This is when the cheque is crossed with two parallel lines without any additional instructions. It means that the cheque can only be deposited into a bank account and not encashed.

2. Special Crossing: This is when the cheque is crossed with two parallel lines with additional instructions such as "account payee only" or "not negotiable". It means that the payment can only be made to the account holder mentioned on the cheque.

3. Restrictive Crossing: This is when the cheque is crossed with two parallel lines with the name of a particular bank. It means that the payment can only be made to the account holder with that bank.

Dishonoured Cheque

A dishonoured cheque is a cheque that the bank refuses to pay due to various reasons such as insufficient funds, a mismatch in signatures, or a closed account. When a cheque is dishonoured, it is returned to the account holder with a reason for the refusal. The account holder can then rectify the issue and present the cheque again for payment.