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  • Case Study On Crossing & Endorsement

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    সায়েম উল আরাফাত প্রিতম
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    Mr. Ganesh drew a cheque that was deposited by Mr. Kamal into his bank account. The cheque was sent through multiple banks for collection. 1) Mr. Ganesh could use a general crossing on the cheque. Later holders could convert it to a special crossing mentioning the bank. The collecting and presenting banks could use double special crossing mentioning each other. 2) The endorsements required are: Mr. Kamal endorses to deposit into his account. The collecting bank endorses to credit upon realization. The presenting bank endorses confirming the first endorsement and credit upon realization.

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    Case Study on Crossing & Endorsement

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    Mr. Ganesh drew a cheque that was deposited by Mr. Kamal into his bank account. The cheque was sent through multiple banks for collection. 1) Mr. Ganesh could use a general crossing on the cheque. Later holders could convert it to a special crossing mentioning the bank. The collecting and presenting banks could use double special crossing mentioning each other. 2) The endorsements required are: Mr. Kamal endorses to deposit into his account. The collecting bank endorses to credit upon realization. The presenting bank endorses confirming the first endorsement and credit upon realization.

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    34 views2 pages

    Case Study On Crossing & Endorsement

    Uploaded by

    সায়েম উল আরাফাত প্রিতম
    Mr. Ganesh drew a cheque that was deposited by Mr. Kamal into his bank account. The cheque was sent through multiple banks for collection. 1) Mr. Ganesh could use a general crossing on the cheque. Later holders could convert it to a special crossing mentioning the bank. The collecting and presenting banks could use double special crossing mentioning each other. 2) The endorsements required are: Mr. Kamal endorses to deposit into his account. The collecting bank endorses to credit upon realization. The presenting bank endorses confirming the first endorsement and credit upon realization.

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    of 2

    Case Study:

    Mr. Ganesh drawn a non-MICR cheque of Sonali Bank Savar branch in favor of Mr. Jamal. Mr. Jamal
    handed over that cheque with proper endorsement to Mr. Kamal of Chittagong. Mr. Kamal deposited
    that cheque to his savings account in Agrani Bank Chittagong branch for Collection. Agrani Bank
    Chittagong branch send that cheque to their branch in Savar for manual collection.

    a) In this situation what type of crossing may be used by


    1) Mr. Ganesh, Mr. Jamal and Mr. Kamal
    2) Agrani Bank Chittagong branch and Agrani Bank Savar Branch?
    b) Which type of endorsement is required for making payment of that cheque by paying branch
    (Sonali Bank Savar ) from
    1) Mr. Kamal as depositor of that cheque,
    2) Agrani Bank Chittagong Branch as Collecting Bank Branch and
    3) Agrani Bank Savar branch as presenting bank branch of that cheque to Sonali Bank
    Savar

    Answer:

    Let’s draw a complete picture before delving deep into the case. Here “Mr. Ganesh” is the Drawer of the
    cheque, “Sonali Bank Savar Branch” is the Drawee and Paying Bank as well, and Mr. Jamal is the Payee
    at first place. Payee will be changed with proper endorsement. In this case, Mr. Jamal and Mr. Kamal
    become Payee subsequently as they are Holder in Due Course with proper endorsement. Accordingly,
    Mr. Kamal becomes the final Payee who deposited the cheque to his bank i.e. Agrani Bank Chittagong
    Branch for Collection. So, “Agrani Bank Chittagong Branch” is the Collecting Bank (Branch). “Agrani Bank
    Chittagong Branch” sends the cheque to its agent “Agrani Bank Savar Branch” for collection. And then
    “Agrani Bank Savar Branch” presents the cheque to “Sonali Bank Savar Branch” for payment. So, “Agrani
    Bank Savar Branch” is the Presenting Bank here. As mentioned earlier, “Sonali Bank Savar Branch” is the
    Paying Bank.

    a) Now, let’s explore through the queries. Different parties may cross the cheque as follows:
    1) Mr. Ganesh, the Drawer, may use simple General Crossing by drawing two parallel
    transverse lines on the upper left corner of the cheque while transferring the cheque to
    Mr. Jamal. He may or may not mention “& Company”, “A/c. Payee”. Mr. Jamal may
    transfer the cheque to Mr. Kamal by endorsing it mentioning “Please pay to Mr. Kamal
    or order”. And then Mr. Kamal may endorse it further mentioning “Please credit my
    account” while depositing the cheque to his bank (Agrani Bank Chittagong Branch) i.e.
    Collecting Bank for collection. In later cases, it seems only endorsement shall be
    sufficient to negotiate the cheque further. However, Mr. Jamal may transfer the cheque
    to Mr. Kamal by crossing (Special Crossing) it mentioning “Payee’s A/c at Agrani Bank”. A
    general crossing may be converted into a special crossing by a holder by adding the
    name of a banker to make the payment of the cheque safer.
    2) Upon receiving the cheque from Mr. Kamal, the collecting bank, Agrani Bank Chittagong
    Branch, may cross (Special Crossing) it mentioning “Agrani Bank Chittagong Branch” for
    safety and send it to the presenting bank, Agrani Bank Savar Branch. While sending,
    Agrani Bank Chittagong Branch may further cross it by mentioning “Agrani Bank Savar
    Branch”. Such crossing is called Double Crossing, a special type of crossing. When the
    banker, to whom the cheque is crossed specially, again cross it especially to another
    banker, his agent, for collection is called Double Special Crossing.
    b) While making payment by the paying bank i.e. Sonali Bank Savar Branch, it will check the
    endorsements mentioned in the cheque to make itself satisfied about the valid transfer of the
    instrument (Holder in Due Course). Different parties may endorse the cheque as follows:
    1) Mr. Kamal as the depositor of the cheque may endorse it mentioning “Please credit my
    account” while depositing the cheque to his bank (Agrani Bank Chittagong Branch) i.e.
    Collecting Bank for collection.
    2) Agrani Bank Chittagong Branch as the Collecting Bank (Branch) of the cheque may
    endorse it mentioning “Payee’s account will be credited upon realization” before
    sending the cheque to its agent (Agrani Bank Savar Branch) i.e. Presenting Bank.
    3) The Presenting Bank (Agrani Bank Savar Branch) may endorse it mentioning “Our first
    branch endorsement confirmed, Payee’s account credited upon realization”.

    This is how different types of Crossing and Endorsement may be found in practice.

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