"CHEQUE & ITS TYPES"
For SBI PO-RRBs-IBPS PO/ Clerk
As per Section 6A cheque is a 1. Drawn on specified bank, 2. Bill of exchange and 3. Not expressed to be payable otherwise than on demand. It includes electronic image of a truncated cheque and also an electronic cheque.
Parties to a cheque are drawer (the account holder), Drawee (the bank with whom the account is maintained) and payee (the person named in the cheque). The other parties also come into picture subsequently and include endorser and endorse. Drawee of a cheque can be a bank only.
Electronic/ Truncated Cheques:
After amendment to NI Act during Dec 2002, the cheque also means a cheque in Electronic Form and electronic image of a Truncated Cheque.
It is a cheque the physical movement of which is stopped in the process of collection or clearing. In its place its electronic image (confirmed by electronic signature of the collecting bank) is used for collecting the payment.
A Cheque is truncated during the clearing process either by the clearing house or by the bank whether paying or receiving the payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in physical form.
Electronic Cheque is a cheque which contains the exact mirror image of a paper cheque and is generated, written and singed in a secured system ensuring the minimum safety standards with the use of digital signature (with or without Biometrics signatures and asymmetric Crypto system).
Types of Cheque:
- Bearer or Order Cheques – Where nothing is mentioned about a cheque being bearer or order, it should be treated to be payable to order. Its conversion from order to bearer should be with full signatures. If both the words bearer as well as order are written and none of these is deleted, the cheque would be considered to be a bearer cheque.
- Post Dated Cheques – The cheques which bear a date subsequent to the date on which it is drawn and the data has not fallen due till presentment, are called post dated cheque. Such cheques become effective on the date mentioned on the body of the cheque and the drawer of such cheque can be used by the holder after the mentioned date only.
- Stale Cheques – On date of presentation, if the validity period of a cheque has already expired it is called a stale cheque, it cannot be paid. The maximum validity period is 3 months. It can be restricted to a lesser period by the drawer.
- Ante Dated Cheques – A cheque bearing a date prior to actual date of signature the cheque or opening of an account is called an ante dated cheque., which is valid and can be paid till it become stale. For Example, a cheque dated October 16, 2004 for an account opened on October 25, 2004, can be paid during its validity period.
- Outstanding Cheques – A cheque which has been written and therefore has been entered in the company’s register, but which has not been presented for payment and so has not been debited from the company’s bank account.
- Travelers’ Cheques – It is an instrument issued by a bank for remittance of money from one place to another.
- Crossed Cheque – A cheque is one which has two short parallel lines marked across its face. A cheque crossed specially will be paid only when it is submitted for collection by the bank named between the parallel lines. Such crossing affords a greater measure of protection against loss.