Multiple choice

Which of the following is/are not the feature(s) of an ‘account payee crossing’?

  1. It is defined as per Section 130 of NI Act.

  2. Its payee is holder only.

  3. It can be endorsed and transferred any number of times.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The significance of crossing is that the payment of the instrument can only be made through a Banker (Account Holder). When it is a crossed instrument, it gives direction to the paying Banker (Bank) to pay the money to a Banker. Thus, the holder of such an instrument must deposit the same into his or the other person’s Bank Account for collection. An instrument is crossed in order to provide a safeguard against theft of fraud. Thus, all the given options are not true in case of ‘account payee crossing’. 

Keep practicing — related questions