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8/13/2019 Banking CIA
http://slidepdf.com/reader/full/banking-cia 1/17
Banking and insurancecia -2
CROSSING
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Introduction - crossing
Father of crossing – Irwin
In the year 1856 , crossing of cheques became a
matter of legislation .
It was laid down by the 1956 act
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what is crossing ?
Bellamy Bs. Morjori banks “ rossing is a merememorandum on the face of the cheque and forms
no part of the instrument itslef and in no way alters
its effect “
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Kinds of crossing
General crossing
Specific crossing
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General crossing
Where a cheque bears across its face an addition ofthe words 'and company' or any abbreviation thereof,
between two parallel transverse lines, or of two
parallel transverse lines simply, either with or without
the words 'not negotiable', that addition shall bedeemed a crossing, and the cheque shall be deemed
to be crossed generally
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Essentials of generalcrossing
2 lines are of paramount importance in crossing
The lines must be parallel and transverse
The lines are generally drawn on the left side and
should cut across some kind of writing
The words ‘and company’ or its abbreviations may
be written in-between the lines.
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Significance of generalcrossing
Gives direction to the payee banker
The direction is that the banker should not pay thecheque at the counter. It should be paid only to afellow banker
Gives protection
However forgery can happen and hence specialcrossing was introduced
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Special crossing
Where a cheque bears across its face an addition ofthe name of a banker, either with or without the
words 'not negotiable', that addition shall be deemed
a crossing, and the cheque shall be deemed to be
crossed specially, and to be crossed to that banker.This is called special-crossed cheque.
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Essentials of specialcrossing
2 parallel transverse lines are not essential
The name of the banker must be necessarily
specified across the face of the cheque
Appears on the left side
The words ‘not negotiable’ maybe added
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Significance of specialcrossing
It also gives direction
A special crosiing gives more protection to the
cheque than in general crossing
The banker in whose favour the cheque has beencrossed, knows the payee and his specimen
signature well
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Not negotiable crossing
The words 'not negotiable' can be added to general-as well as special-crossing and a crossing with these
words is known as not negotiable crossing.
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Significance
The effect of such a crossing is that it removes themost important characteristic of a negotiable
instrument i.e. the transferee of such a crossed
cheque cannot get a better title than that of the
transferor (cannot become a holder in due course)and cannot convey a better title to his own
transferee, though the instrument remains
transferable.
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A/c payee crossing
This crossing can be made in both general andspecial crossing by adding the words account
payee. In this type of crossing the collecting banker
is supposed to credit the amount of the cheque to the
account of the payee only. The cheque remainstransferable but the liability of the collecting banker is
enhanced in case he credits the proceeds of the
cheque so crossed to any person other than the
payee and the endorsement in favour of the last
payee is proved forged.
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Double crossing
where a cheque is crossed specially, the banker towhom it is crossed, may again cross it specially to
another banker, hs agent for collection
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Who can cross a cheque
The drawer of a cheque can cross it at the time ofissuing it.
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Opening of crossing
The cancellation of crossing is usually termed asopening of crossing.
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Thank you..!!