BANKING AFFAIRS

Detailed explanation-1: -If a cheque is crossed and “Account Payee Only” or “Not Negotiable” is written on it, then it means that the cheque cannot be endorsed to anybody else. The cheque has to be necessarily collected by the banker of the payee on his behalf.

Detailed explanation-2: -Once a check is crossed, it’s impossible for the payee to uncross it. Furthermore, such crossed checks are considered non-transferable, meaning they cannot be signed over to a third party. The only action permitted is for the payee to deposit the check in an account that the payee holds in their own name.

Detailed explanation-3: -Account payee Adding a crossing to a cheque increases its security in that it cannot be cashed at a bank counter but must be paid into an account in exactly the same name as the payee or endorsee indicated on the check.

Detailed explanation-4: -An Account Payee Cheque is a highly secured type of cheque as the amount can only be deposited in the account of payee. The payee cannot endorse this cheque to anyone else.

Detailed explanation-5: -An account payee cheque is a type of crossed cheque increases the security on the cheque. For this type of crossed cheque, you must write “A/c payee only” in between the crossed lines. The payee cannot endorse the cheque. Thus, the cheque amount can only be deposited in the payee account.