BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Bearer cheque can be negotiated with endorsement and delivery only
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Order cheque can be negotiated with endorsement only
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After a blank endorsement on an order cheque, the cheque can be negotiated further with delivery only
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Endorsement on a bearer cheque makes it an order instrument
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Detailed explanation-1: -13[(1) If the endorser signs his name only, the endorsement is said to be “in blank", and if he adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person, the endorsement is said to be “in full", and the person so specified is called the “endorsee” of the instrument.
Detailed explanation-2: -Share: When someone pays you with a check, typically you have to sign the back of it before you can deposit it in your account. Signing the back of it is called “endorsing the check.”
Detailed explanation-3: -Blank endorsement of a financial instrument, such as a cheque, is only a signature, not indicating the payee. The effect of this is that it is payable only to the bearer – legally, it transforms an order instrument ("pay to the order of (the payee)") into a bearer instrument ("pay to the bearer").
Detailed explanation-4: -If the indorsement is made by a holder and is not a special indorsement, it is a blank indorsement. For example, the holder of an instrument, intending to make a special indorsement, writes the words “Pay to the order of” without completing the indorsement by writing the name of the indorsee.