Banking CIA

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8/13/2019 Banking CIA

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Banking and insurancecia -2

CROSSING

Introduction - crossing

Father of crossing – Irwin

In the year 1856 , crossing of cheques became a

matter of legislation .

It was laid down by the 1956 act

what is crossing ?

Bellamy Bs. Morjori banks “ rossing is a merememorandum on the face of the cheque and forms

no part of the instrument itslef and in no way alters

its effect “

Kinds of crossing

General crossing

Specific crossing

General crossing

Where a cheque bears across its face an addition ofthe words 'and company' or any abbreviation thereof,

between two parallel transverse lines, or of two

parallel transverse lines simply, either with or without

the words 'not negotiable', that addition shall bedeemed a crossing, and the cheque shall be deemed

to be crossed generally

Essentials of generalcrossing

2 lines are of paramount importance in crossing

The lines must be parallel and transverse

The lines are generally drawn on the left side and

should cut across some kind of writing

The words ‘and company’ or its abbreviations may

be written in-between the lines.

Significance of generalcrossing

Gives direction to the payee banker

The direction is that the banker should not pay thecheque at the counter. It should be paid only to afellow banker

Gives protection

However forgery can happen and hence specialcrossing was introduced

Special crossing

Where a cheque bears across its face an addition ofthe name of a banker, either with or without the

words 'not negotiable', that addition shall be deemed

a crossing, and the cheque shall be deemed to be

crossed specially, and to be crossed to that banker.This is called special-crossed cheque.

Essentials of specialcrossing

2 parallel transverse lines are not essential

The name of the banker must be necessarily

specified across the face of the cheque

Appears on the left side

The words ‘not negotiable’ maybe added

Significance of specialcrossing

It also gives direction

A special crosiing gives more protection to the

cheque than in general crossing

The banker in whose favour the cheque has beencrossed, knows the payee and his specimen

signature well

Not negotiable crossing

The words 'not negotiable' can be added to general-as well as special-crossing and a crossing with these

words is known as not negotiable crossing.

Significance

The effect of such a crossing is that it removes themost important characteristic of a negotiable

instrument i.e. the transferee of such a crossed

cheque cannot get a better title than that of the

transferor (cannot become a holder in due course)and cannot convey a better title to his own

transferee, though the instrument remains

transferable.

A/c payee crossing

This crossing can be made in both general andspecial crossing by adding the words account

payee. In this type of crossing the collecting banker

is supposed to credit the amount of the cheque to the

account of the payee only. The cheque remainstransferable but the liability of the collecting banker is

enhanced in case he credits the proceeds of the

cheque so crossed to any person other than the

payee and the endorsement in favour of the last

payee is proved forged.

Double crossing

where a cheque is crossed specially, the banker towhom it is crossed, may again cross it specially to

another banker, hs agent for collection

Who can cross a cheque

The drawer of a cheque can cross it at the time ofissuing it.

Opening of crossing

The cancellation of crossing is usually termed asopening of crossing.

Thank you..!!

Banking CIA

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