Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd
Upload
76 views18 pages

Welcome To My Presentation: Presented by Saimom Mostafa 19 FIN 061

Uploaded by

Saimom Mostafa Emon

This document provides an overview of crossing and payment of cheques. It discusses general crossing, which involves drawing two parallel lines on the cheque, and special crossing, where the bank name is written between the lines. It also covers topics like proper cheque formatting, stale and post-dated cheques, payment refusal reasons, and cheque collection processes where the collecting bank acts either as a holder for value or as an agent. Key responsibilities of collecting banks are to collect cheques with due care, present them timely, and take precautions to protect the true owner's interests.

Copyright:

© All Rights Reserved
Download as PPTX, PDF, TXT or read online from Scribd
Download as pptx, pdf, or txt

Welcome To My Presentation: Presented by Saimom Mostafa 19 FIN 061

Uploaded by

Saimom Mostafa Emon
76 views18 pages
This document provides an overview of crossing and payment of cheques. It discusses general crossing, which involves drawing two parallel lines on the cheque, and special crossing, where the bank name is written between the lines. It also covers topics like proper cheque formatting, stale and post-dated cheques, payment refusal reasons, and cheque collection processes where the collecting bank acts either as a holder for value or as an agent. Key responsibilities of collecting banks are to collect cheques with due care, present them timely, and take precautions to protect the true owner's interests.

Original Description:

Crossing, Payment and Collection of Cheque

Original Title

Crossing of Cheque

Copyright

© © All Rights Reserved

Available Formats

PPTX, PDF, TXT or read online from Scribd

Did you find this document useful?

Is this content inappropriate?

This document provides an overview of crossing and payment of cheques. It discusses general crossing, which involves drawing two parallel lines on the cheque, and special crossing, where the bank name is written between the lines. It also covers topics like proper cheque formatting, stale and post-dated cheques, payment refusal reasons, and cheque collection processes where the collecting bank acts either as a holder for value or as an agent. Key responsibilities of collecting banks are to collect cheques with due care, present them timely, and take precautions to protect the true owner's interests.

Copyright:

© All Rights Reserved
Download as PPTX, PDF, TXT or read online from Scribd
Download as pptx, pdf, or txt
76 views18 pages

Welcome To My Presentation: Presented by Saimom Mostafa 19 FIN 061

Uploaded by

Saimom Mostafa Emon
This document provides an overview of crossing and payment of cheques. It discusses general crossing, which involves drawing two parallel lines on the cheque, and special crossing, where the bank name is written between the lines. It also covers topics like proper cheque formatting, stale and post-dated cheques, payment refusal reasons, and cheque collection processes where the collecting bank acts either as a holder for value or as an agent. Key responsibilities of collecting banks are to collect cheques with due care, present them timely, and take precautions to protect the true owner's interests.

Copyright:

© All Rights Reserved
Download as PPTX, PDF, TXT or read online from Scribd
Download as pptx, pdf, or txt
You are on page 1/ 18

Welcome to

My Presentation
Presented by
Saimom Mostafa
19 FIN 061
Presentation on

Crossing of Cheques
Payment of Cheques
&
Collection of Cheques
Chapter-29
Crossing of Cheques
A crossed check is a check that is crossed with two
parallel lines, either through the top left-hand corner of
the check or horizontally across the whole check.
Types of Crossing

 General Crossing
 Special Crossing

General Crossing Special Crossing


General Crossing

A cheque is said to be crossed generally when it bears across


it’s face of the following:
 Two transverse parallel lines.
 “And Company” or “And Co.”.
 “& Company”.
 “Not Negotiable”.
 “Account Payee Only”.
Special Crossing

 It is a cheque in which the name of the bank is written between two


parallel lines and hence it can be paid to that specific banker only.
 Special Crossing can never be converted to General Crossing.
 In Special Crossing paying banker to honor the cheque only when it
is presented through the bank mentioned in the crossing and no
other bank.
 Special Crossing, no such lines are necessary.
Persons who can Cross a Cheques:
 The holder of a cheque
 The banker to whom the cheque is crossed

Not Negotiable Crossing:


 “NOT NEGOTIABLE” does not mean not transferable.
 It can be transferred like any other cheque.
 The word ‟NOT NEGOITABLE‟ can be added to general as well as
special crossing
 The transferee of such a crossed cheque cannot get a better title than
that of a transferor (cannot become a holder in a due course)
Double Crossing
When a cheque bears two special crossing, is called Double Crossing.
In this second bank act as agent of the first collecting banker.
Obliterated Crossing
When a crossing on a cheque is obliterated or removed by a dishonest
person, this kind of cheque is recognized as Obliterated Crossing.
Opening of Crossing
When the crossing on a cheque is cancelled, it is called opening of the
crossing. The cheque then becomes an open cheque.
Chapter-30
Payment of Cheques
Proper Form of Cheque
The Negotiable Instruments Act defines a cheque but does not prescribe its form and it
is not required that a cheque should be drawn on the printed form issued by the bank.
Date of Cheque
A cheque must bear a date because it is legally effective on the date mentioned
in it.
Stale Cheques
If a cheque is not presented for payment within a reasonable period after the
date of its issue, it becomes a stale cheque.
Post-dated Cheques
A cheque bearing a future date is a post dated cheque.
Cheques drawn in Bangla with Bangla Date
There is no restriction to use any date on a cheque. One can use
Bangla date system and another can use Gregorian date system it is
up to the customer.
Amount of Cheques
The amount of the cheque must be certain and expressed both in
words and figures.
Funds in the account
Funds in the account must be sufficient. If isn’t banker is not bound
to make the payment.
Payment of Mutilated Cheques
A mutilated cheque is one which is torn in places or into two or
more pieces.
Protection in case of order Cheques
In case of an order cheque, Section 85(1) provides statutory
protection to the paying banker.
There are two conditions-
 Endorsement must be regular
 Payment must be made in due course
Effect of statutory Protection
The statutory protection is available to the banker in case of forged
signature of the endorser and not that of the drawer.
Protection in case of Bearer Cheques
Section 85(2) provides protection to the paying banker in respect of
bearer cheques.
Refusal to Payment of Cheques by Banks
The statutory duty of a bank to honor his customer’s cheques is
terminated in the following circumstances:
 When the drawer countermands payment
 Death of the Drawer
 Insolvency of the Drawer
 Insolvency of a Partner
 Insolvency of Joint Account-holder
 Liquidation of a Joint Stock Company
 Breach of Trust
 Defective title of the Party
Suitable Replies to Dishonored Cheques

When a banker dishonors a cheque


he has to give a reason for doing so.
All banks have printed slips
containing various reasons for
dishonoring a cheque.
Chapter-31
Collection of Cheques

Collection of cheques, bills of exchange and other instruments on


behalf of a customer is an indispensable service rendered by banks.

While collecting a customer’s cheques, a banker acts either-


 As a holder for value, or
 As an agent of the customer.

Collecting banker as a Holder for Value


If the collecting banker pays to the customer the amount of the cheque or
credits such amount to his account and allows him to draw it, before the
amount of the cheque is actually realized from the drawee banker (paying
banker), the collecting banker is deemed to be its ‘holder for value’.
Collecting Banker as an Agent of the Customer
 A collecting banker acts as an Agent of the customer when the
customer’s cheque is collected and actually realized from the drawee
banker.
 The customer is entitled to draw the amount from his account when the
amount of cheque has been credited to his account.

Conversion
Conversion means wrongful meddling or interference with the goods of
others. Here, goods includes Bill of Exchange, Cheque or Promissory note.
It can be committed innocently. Conversion is the act which renders the
person liable committing it. This liability exists even when the person is
merely acts as an agent to his principal.
Negligence
 There is no specific meaning being clarified by the banking laws, but on the basis
of circumstances aroused, court of law have given judgments and that is why the
meaning and scope of Negligence is ever expanding based on new
circumstances.
 Even to avail the protection under section 131 of the Negotiable Instrument Act,
the collecting banker has to prove that the act was made without any Negligence.
This is because the true owner’s case is complete, as soon as conversion is
proved against the banker.
 Negligence under section 131 is more or less artificial as there is no contractual
relationship between the true owner and the collecting banker.
 “Negligence is doing of that which a reasonable man under all the circumstances
of a particular case which he is acting, would not do, or the failure to do
something, which a reasonable man under those circumstances would do.”
Liabilities of a Collecting Banker

 Collecting cheques with due care and presenting it to drawee banker in reasonable
time.
 Presenting the cheque to drawee banker on next working day in case if both the
banks are located in same area.
 Sending the cheque through clearing house or post to drawee bank in case of
outstation bank.
 Taking due care and precaution for the interest of true owner of a cheque.
 Verify the endorsement properly on order cheque.
 Proper investigation of ‘Per Pro’ endorsements to avoid negligence on the part of
collecting banker and to avail statutory protection.
 Obtaining introduction of the customer, in case if the account is being open without
proper introduction.
 Verifying the detail in case of any doubt regarding the true ownership of the cheque.
Thank You

You might also like