Legal Question in Banking Law in India

22.02.2016

Dear Sir / Madam,

Although I have already answered this very query earlier, I will answer it again. A cheque is of three types :

"Cash / Self Cheque" implies that the Account holder himself / herself is visiting the Bank to withdraw the Cash and the word "Self" is written alongside the word "Pay ______" on the face of the cheque. In such an instance, the Account holder is required to sign on the reverse of the cheque in the presence of the Cashier at the time of withdrawing the Cash at the counter.

"Bearer Cheque" implies that the Account holder has issued the cheque in another person's name (bearer) with that person's name written alongside the word "Pay _______" on the face of the cheque. In such an instance, the Account holder need not sign on the reverse of the cheque. The person in whose name such a cheque has been issued has to sign on the reverse of the cheque in the presence of the Cashier at the time of withdrawing the Cash.

"Crossed Cheque" implies that the Account holder has issued the cheque in the name of another person / entity (Payee) with two parallel lines across the top left corner of the cheque with or without the words "A/c payee" within the parallel lines and by / by not cancelling the words "or bearer" appearing at end of the "Pay _______" field space. in such an instance, the cheque has to be deposited by the Payee in his / her Account and the proceeds of the cheque (cheque amount) will be directly credited to the Payee's A/c.

Regards,