A cheque is an important financial tool in the UAE. It is an important form of payments that’s been existing even before the ATM cards era and still going strong. It is not just essential for individuals but also businesses and companies to perform huge transactions. Handling a cheque is not just as easy as it seems to be. The cheque holders need to be very cautious while writing one. There are several restrictions and points to be kept in mind while writing a cheque else the cheque can be invalid or the account holder can also be a victim of cheque frauds.
Some of the key tips to follow while writing a cheque are,
- Ensure the letters and figures on the cheque are clear
- Don’t overwrite or make many errors while writing a cheque
- Don’t overdo the signature. Make sure you put the right signature on the cheque
- Put the correct date
- Put a line through the unused spaces on the cheque
- Cross the cheque whenever applicable
What is a Crossed Cheque?
Though the other specifics to keep in mind while writing a cheque are simple, but “Crossing Cheque” can be new to the first-time cheque holder.
When the cheque holder writes the cheque and draws two parallel lines on the cheque’s top left corner, it is Crossed Cheque. In between these parallel lines, the cheque holder can mention “A/C Payee” which is even specific that the cheque transfer happens only to the account of the payee/bearer. Once these lines are drawn you can’t uncross them. You need to provide a new cheque again if you want the payee to encash it.
Check: The Validity of a Cheque in the UAE
Why do you need to Cross Cheque?
Cheque crossing is done to specify that the amount on the cheque should be transferred only to the bank account of that payee (the one the cheque is written for). When there is an Account Payee (A/C Payee) on the cheque, the payee can’t cash out the cheque and deposit the cheque in their respective banks to the funds transferred into their accounts.
The reason why you need to cross while giving a cheque is,
- A crossed cheque is an instruction to the bank to deposit the fund in the payee’s account
- To minimize the risk of misuse of the cheque. The risk of counterfeiting will be avoided as only the payee can deposit the cheque into their bank account.
- As the payee can’t encash the cheque, the money transfer happens online and the transaction will be recorded
Also, know: What is the Managers Cheque in the UAE?
Who can you give a crossed cheque to?
You can give a crossed cheque to anyone. But if you want the bearer or payee to encash using the cheque then don’t cross it. Crossed cheque can be given to
- Any payee with a bank account. If the payee doesn’t have a bank account and you provide a crossed cheque then they can’t make use of it and the cheque will be valid
- Utility bills
- Rent
- Business purchases
- School fees and much more
Usually, a crossed cheque takes 2-3 business days to clear as the amount needs to be deposited to the bearer/payee’s bank account. Also, if you are the cheque bearer then you can’t endorse the cheque to someone else. A crossed cheque is something specific only to the bearer/payee whose name is on the cheque. No one can use it.
About the author
Nikitha is a Senior Analyst at MyMoneySouq.com. She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.
