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What is a Crossed Cheque?
Posted on Monday, September 9th, 2024 | By IndusInd Bank
When you write a cheque, you expect it to reach the right hands. However, imagine you lose the cheque or that it falls into the wrong hands. The thought of someone else potentially being able to cash can be stressful. This is where a crossed cheque comes into play.
A crossed cheque can be identified by two parallel lines. It ensures that the funds can only be deposited into a bank account and not cashed directly. The two parallel lines create a robust layer of security for the transaction.
Let’s learn more about crossed cheques below.
Understanding Crossed Cheques
- It is a standard cheque with two parallel lines drawn across its face, usually at the top left corner.
- The crossing of a cheque is intended to direct the cheque’s amount into a bank account rather than being cashed out. It ensures that only the payee, whose name is mentioned on the cheque, can access the funds.
- A crossed cheque minimises the risk of theft and unauthorized access to funds.
- A crossed cheque also leads to a clear record of the transaction. It makes it possible to track and verify the beneficiary’s information.
- Different countries can have separate guidelines on how to cross a cheque.
- The process of how to cross a cheque is simple but effective in safeguarding financial transactions.
Also Read: Decoding Bank Cheque Books
Different Ways to Cross a Cheque
One can cross a cheque in various ways, such as:
1. General Crossing
Two parallel lines are drawn across the cheque without any specific instructions. This indicates the cheque can be deposited into any bank account but cannot be cashed directly over the counter.
2. Special Crossing
The name of a specific bank is written between the two parallel lines. This means the crossed cheque can only be deposited into an account at the named bank. A special crossing cheque provides an extra layer of security.
3. Account Payee Crossing
This type of crossing includes the words ‘Account Payee’ or ‘A/C Payee’ written between the lines. This restricts the cheque further and ensures it can only be deposited into the named payee’s account.
4. Non-negotiable Crossing
This type of cheque crossing indicates that the cheque can be transferred but it cannot be negotiated for cash. Here, the ‘cheque holder’ assumes the role of a transferor only.
Now that you have understood the meaning of a cross cheque and its types, let’s look at its merits and demerits.
Pros and Cons of a Crossed Cheque
Here are some merits and demerits of a crossed cheque:
| Merits of Crossed Cheques | Demerits of Crossed Cheques |
| Reduces the risk of theft or fraud | Cannot be cashed over the counter |
| Are easier to track, as they leave a clear paper trail | Delays in accessing funds after being deposited into a bank account |
| Minimise the chances of unauthorised transactions | Has the depositor rely on banking hours and services, which can be a limitation for quick access |
Conclusion
Crossed cheques are an invaluable tool in the world of banking. They create trust and assurance in the payee’s mind about the safety status of the cheque. Understanding what a cross cheque is and the different ways to cross a cheque can help you make informed decisions.
To enjoy a reliable and secure banking experience, open a Savings Account with IndusInd Bank. Whether you want to open a new account, transfer funds digitally, or use a crossed cheque, you can do it safely with us.
Open a Savings Account online and take advantage of our secure banking services today.
Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.
