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Sujai Adithya
Business Development and Banking & Financial Services Expert
Asked a question last year

What is a cheque?

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Sujai Adithya
Business Development and Banking & Financial Services Expert

Cheque is a signed unconditional order addressing the bank to credit the amount to the holder of instrument. Cheque is a widely used mode of payment. It is used as a safe mode for making payments, and loss can be minimized if lost. It is an order to a bank by the drawer to pay the amount mentioned in the cheque to the presenter of the instrument.

Parties involved In a Cheque:

  1. Drawer - A person that issue the cheque for making payment and person who deposit money to make payment is know as Drawer.
  2. Drawee - Drawee is the bank to whom a drawer gives order to make payment.
  3. Payee - Payee is the person who presents the cheque for payment .A person who deposited cheque to receive payment from bank is know as Payee.

To know about the types of cheques, click here5.

A Cheque is a document which orders a bank to pay a particular amount of money from a person’s account to another individual’s or company’s account in whose name the cheque has been made or issued. The cheque is utilised to make safe, secure and convenient payments. It serves as a secure option since hard cash is not involved during the transfer process; hence the fear of loss or theft is minimised.