Negotiable instrument
This query is : Resolved
sheetal chechani
(Querist)
02 September 2010
Hi all
can any one tell me what is the effect of the word "not negotiable" which is written on the cheque.
can any one tell me what is the effect of the word "not negotiable" which is written on the cheque.
02 September 2010
"Not negotiable" cheques
Most people "cross" their cheques and write the words "not negotiable" between the lines. This is a good idea because it tells the bank that the cheque should not be paid on demand, and must instead be paid into the account of the payee. This means the cheque will go through the clearing system and find its way to the payee's account.
If the cheque is not crossed it is considered a legal "negotiable instrument" i.e. almost like cash, the amount named on the cheque can transferred on delivery to the bank.
Most people "cross" their cheques and write the words "not negotiable" between the lines. This is a good idea because it tells the bank that the cheque should not be paid on demand, and must instead be paid into the account of the payee. This means the cheque will go through the clearing system and find its way to the payee's account.
If the cheque is not crossed it is considered a legal "negotiable instrument" i.e. almost like cash, the amount named on the cheque can transferred on delivery to the bank.
Manmohan ACA, CS
(Expert)
02 September 2010
words "not negotiable" between the lines ID FOLLOWED BY NAME OF THE BRANCH OR BANK , WHICH MEANS THAT THE CHEQUE WILL BE CLEARED ONLY AT THAT BANK/BRANCH AND CAN NOT BE TRANSFERRED
sheetal chechani
(Querist)
02 September 2010
thanks to both of u for yr reply.
bt clear me that what is the difference between cheque with the words " account payee" and with the word " Not negotiable "
and also a cheque using with both the words " account payee & not negotiable "
on its face.
as i knows both r types of crossing .
bt clear me that what is the difference between cheque with the words " account payee" and with the word " Not negotiable "
and also a cheque using with both the words " account payee & not negotiable "
on its face.
as i knows both r types of crossing .
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