cheque

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cheque

a BILL OF EXCHANGE drawn on a banker, payable on demand. A cheque operates as a mandate or authority to the drawee's bank to pay the party named as drawer and debit the account of its customer, the drawer. Cheques are essentially negotiable instruments and may be negotiated by indorsement. The Bills of Exchange Act 1882, however, provides that a cheque may be crossed. In this case the cheque should be presented for payment by a bank (rather than the person named as drawee). If accompanied by the words ‘not negotiable’, this has the effect that the cheque cannot be negotiated, and the words ‘account payee’ or ‘account payee only’ mean that the cheque cannot be passed on to another.
Collins Dictionary of Law © W.J. Stewart, 2006
References in periodicals archive ?
"A ban on third-party cheques may make it difficult for a handful of investors, but it will prevent such frauds and should be enforced," says Dhirendra Kumar, CEO of Value Research.
Apart from mutual funds, a host of financial transaction allows one to use third-party cheques. One can argue that thirdparty payments should be allowed for urgent transactions, such as bill payments and EMIs, because the borrower may be facing an emergency.
"Banning third-party cheques will also curtail misuse of the facility to transfer wealth or hold pseudo investments," says Rajesh Krishnamoorthy, managing director of iFast Financial Advisers, an online distributor of funds.

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