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By P.Hema


A cheque is a document issued to the bank, directing it to pay the specified sum mentioned in digits as well as words to the person whose name is borne on the cheque. Cheques are also called negotiable instruments. The cheque is utilised to make safe, secure and convenient payments. It serves as a secure option since hard cash is not involved during the transfer process; hence the fear of loss or theft is minimized.

Section 6 in The Negotiable Instruments Act, 1881

A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque in the electronic form. 

Essentials of a Cheque :

There are certain essentials related to a cheque which should be known and understood before using this payment mode for money transfer. Some of the important pointers related to a cheque are:

  • A cheque is an unconditional order.

  • A cheque is always drawn on a particular Bank.

  • Signature on exchequer is a mandate and only by the maker.

  • The amount is always a certain sum of money of one’s account.

  • A cheque is always payable on demand.

  • This cash amount is to be paid to the person mentioned there in, or order, or the bearer.

Number of Parties involved with a Cheque:

Under the cheque, mode of fund payment, there are three parties which are involved for on-track movement of money through a written paper source.

a) Drawer or Maker

He/she is the customer or account holder who issues the cheque.

b) Drawee

It is basically the bank on which the cheque is drawn and is called the “Drawee”. Always remember that a cheque is always drawn on a particular banker.

c) Payee

The individual who is named in the cheque for getting the payment is known as the “Payee”. Interestingly, the drawer and the payee can be the same individual in a particular case.

One should manage a record of the cheque details comprising the cheque number, issuer name, and date for future safety reference and not to forget to mention the payment amount with every cheque that is issued. Usually, cheque books do consist of a section for all such information at the extreme back. However, trying to keep this information handy in order to avoid any kind of confusion, suspicious activity, or possible fraud is favourable.



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