Features And Features Of A Banker's Cheque?

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What is a Banker’s Cheque?
A banker’s cheque similar to a banker’s draft is guaranteed by the bank. This is a pay order drawn on bank’s own funds and signed by a cashier. Banker’s cheques are mostly used for making real estate payments, brokerage payments and institutional payments. The beneficiary needs to deposit a banker’s cheque to the bank to receive the mentioned amount of money. The cheques are usually cleared one day after the deposition.

Features of a Banker’s Cheque:
A banker’s cheque has certain distinctive features. It includes the name of the issuing bank along with its location (upper left-hand corner or upper centre), payee’s name, the amount to be tendered (both in alphabets and numbers) and a printed (facsimile) signature …show more content…

All these features make the cheque make secure to counterfeit items.

Some other features of a banker’s cheque include:

• All banker’s cheques are printed with ‘Non-Negotiable’ meaning it cannot be negotiated further.

• Banker’s cheques are issued only for the clearing area of the respective bank. It can be cleared in any branch of the same bank and city as it comes under the local jurisdiction.

• The validity of a banker’s cheque is 3 months from the date of issue.

• A banker’s cheque cannot dishonour at all unless it’s a fake.

Types of Cheques in India:
Banks provide chequebook facility to their customers according to their account type. The number of cheques in a chequebook also varies as per the type of the chequebook and account. Here is a brief explanation of different types of cheques available in India.

• Bearer Cheque: You can often find cheque leaves printed with the word ‘bearer.’ This means the person holding the signed cheque can withdraw the mentioned amount. These cheques are most vulnerable to frauds and counterfeits and thefts. You can suffer severe financial loss if you have misplaced a bearer …show more content…

It has the account holder’s name on it. Self cheques are encashed from the branch where you have a bank account.

Self cheques can be issued to a third party as well. In this case, the issuer can write ‘self’ instead of writing the name of the third party. Writing ‘self’ on cheques is not safe at all as anyone can claim the cheque as his/her own and the issuer and the bank will not have any clue about the person who encashed the cheque. This situation worsens in the case of a lost or misplaced cheque.

• Pay Yourself Cheque: These cheques are issued by crossing on them as the issuer wants the bank to deduct the money from his/her account. Pay yourself cheques are issued for buying bank drafts, pay orders and fixed deposit receipts.

• PDC: PDC stands for Post Dated Cheques. These cheques are issued with a future date on them as the issuer wants the cheque to be encashed at a specific time. These cheques are issued for making business payments and EMIs.

• Local Cheque: These cheques are issued for presenting to a bank located within the city limits. However, local cheques are getting outdated as multicity chequebooks are replacing them

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