Bankers cheque-One thing you should know

March 23, 2024CHEQUE RETURN-REASONS

Bankers Cheque

Normally, It is seen that a cheque issued by a person to someone is a normal cheque which can be identified as one type of cheque. but in some cases, a cheque issued by the bankers to someone else then that cheque is a banker’s cheque.

In simple words, a cheque is a transferable instrument to send and receive money without any physical transfer of cash. Hence cheque writing should be done safely.

So, A banker’s cheque similar to a banker’s draft is guaranteed by the bank. With the help of a banker’s cheque, you can encash or deposit the amount of the cheque up to the validity period of 3 months.

Contents of this post

What is the Bankers cheque?

A banker’s cheque is a pay order drawn on the bank’s funds and signed by an authorized officer or a bank manager. A banker’s cheque is a cheque that is issued by the banks when required or demanded. It is similar to a banker’s draft which is guaranteed by the bank. 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.

What is the meaning of a Bankers cheque?

A banker’s Cheque or say pay order is an instrument, generally non-negotiable, issued by the bank on behalf of the customer, containing an order to pay a specified sum to the specified person, in the same city.

A banker’s cheque is a cheque that is issued by the banks when required or demanded. It is similar to a banker’s draft which is guaranteed by the bank. 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 deposit. A banker’s cheque is a pay order drawn on the bank’s own funds and signed by a cashier and a senior executive officer.

Any bank issues it on behalf of the person who holds an account with the bank. The cheque is issued to meet a payment obligation to the beneficiary residing in the same city.

Image of a Bankers cheque

How can you identify a banker’s cheque?

You can identify a cheque as a banker’s cheque when you see the word “Banker’s cheque” on the top middle of the cheque. A banker’s Cheque or say pay order is an instrument, generally non-negotiable, issued by the bank on behalf of the customer, containing an order to pay a specified sum to the specified person, in the same city. You can also identify from the above-shown cheques.

What are the features of a Bankers cheque?

These are the features of the banker’s cheque-

1. A banker’s cheque is a pay order drawn on the bank’s funds and signed by the authorized signatories or Branch Manager.
2. It is a non-negotiable financial instrument.
3. It can be deposited within the validity period of 3 months from the date of the cheque.
4. More, It includes the name of the issuing bank along with its location (upper left-hand corner or upper center), the payee’s name, the amount to be tendered (both in alphabets and numbers), and a printed (facsimile) signature of the cashier or senior executive officer of the bank.
5. A banker’s cheque cannot be dishonored at all unless it is a fake.
6. It is used for payment for settling transactions.
7. A banker’s cheque also contains some security features such as a watermark, security thread, color-shifting ink, and special bond paper. All these features make the cheque more secure from counterfeit items.

How do you fill out a banker’s cheque?