A cheque is a bill of exchange drawn upon a specified banker and payable on demand. See.. Distinction between a bill of Exchange and a Cheque. There are two types of Cheques, open cheques and crossed cheques. Open Cheque is one which is payable in cash across the counter of a bank. A crossed cheque is one on which two parallel transverse lines with or without the words "& Co." are drawn. The payment of such a cheque can be obtained only through a banker. Thus crossing is a direction to the drawee banker to pay the amount of money on a crossed cheque through a banker so that the party who obtains the payment of the cheque can be easily traced.

Who may Cross a Cheque?

1) The Drawer:

                 The Drawer may Cross the Cheque generally or specially

2) The Holder:

                  Where the Cheque is uncrossed, the holder may cross it generally or specially. Where it is crossed generally, he may cross it specially. Where it is crossed generally or specially he may add the words " Not Negotiable".



3) The Banker:

                   Where a cheque is crossed specially, the Banker to whom it is crossed may again cross it specially to another banker(his agent) for Collection


See also 

Distinction / Difference between a bill of exchange and Cheque

Characteristics of a Negotiable Instrument

Kinds of Cheques

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