Thursday, 4 August 2016

3 Secrets to Know About Bank Cheques

3 Secrets to Know About Bank Cheques : Dear Readers. Today we are discussing about Bank Cheque. This is important study notes topic in Banking Awareness for For Bank Exams. So, In this post you study some important features, notes and study guide regarding Bank Cheque.

Know about Cheque
Cheque is an important negotiable instrument which can be transferred by mere hand delivery. Cheque is used to make safe and convenient payment. It is less risky and the danger of loss is minimised.

Important 9 Features of Cheques? 
1. Cheque is an instrument in writing
A cheque must be in writing. It can be written in ink pen, ball point pen, typed or even printed. Oral orders are not considered as cheques.

2. Cheque contains an unconditional order
Every cheque contains an unconditional order issued by the customer to his bank. It does not contains a request for payment. A cheque containing conditional orders is dishonoured by the bank.

3. Cheque is drawn by a customer on his bank
A cheque is always drawn on a specific bank mentioned therein. Cheque drawn by stranger are of no meaning. Cheque book facility is made available only to account holder who are supposed to maintain certain minimum balance in the account.

4. Cheque must be signed by customer
A cheque must be signed by customer (Account holder) . Unsigned cheques or signed by persons other than customers are not regarded as cheque.

5. Cheque must be payable on demand
A cheque when presented for payment must be paid on demand. If cheque is made payable after the expiry of certain period of time then it will not be a cheque.

6. Cheque must mention exact amount to be paid
Cheque must be for money only. The amount to be paid by the banker must be certain. It must be written in words and figures.

7. Payee must be certain to whom payment is made
The payee of the cheque should be certain whom the payment of a cheque is to be made i.e. either real person or artificial person like joint stock company. The name of the payee must be written on the cheque or it can be made payable to bearer.

8. Cheque must be duly dated by customer of bank
A cheque must be duly dated by the customer of bank. The cheque must indicate clearly the date, month and the year. A cheque is valid for a period of three months from the date of issue.

9. Cheque has 3 important parties : 
(a) Drawer
(b) Drawee
(c) Payee

1. Drawer : A drawer is a person, who draws a cheque.
2. Drawee : A drawee is a bank on whom a cheque is drawn.
3. Payee : A payee is a person in whose favour a cheque is drawn.

Drawer : Maker or writer of a bill of exchange (check, draft, letter of credit, etc.) who directs the drawee (such as a bank) to pay the stated amount to a third party (the payee). In documentary credit, the drawer is the beneficiary of a letter of credit. Also called writer. The drawer writes the various details including the monetary amount, date, and a payee on the cheque, and signs it, ordering their bank, known as the drawee, to pay that person or company the amount of money stated.

Drawee : Entity that is expected to accept and pay a bill of exchange (check, draft, letter of credit, etc.) on presentation or on a certain date (called due date or maturity date). That means who finally pay amount is called Drawee.

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