Fundamentals of Business Laws and Business Communication · Negotiable Instruments Act, 1881

Crossing of Cheques and Bankers' Protection Explained

Updated 10 October 2026 · Fact-checked

Crossing of a cheque means drawing two parallel transverse lines on its face so that payment is made only through a bank account, not over the counter. The Negotiable Instruments Act recognises general and special crossing, plus the "Not Negotiable" crossing. "Account Payee" is a restrictive direction added by banking practice. Bankers are protected only if they pay or collect properly.

Understand Crossing of Cheques and Bankers' Protection

A cheque is a bill of exchange drawn on a specified banker and payable on demand. An open cheque can be paid in cash across the counter to the person who presents it. If it is lost or stolen, a thief could simply collect cash. Crossing reduces this risk.

A crossed cheque has two parallel transverse lines drawn on its face, usually in the top-left corner. With or without words such as "& Co.", this is a general crossing (Section 123). The banker must not pay a crossed cheque over the counter. Payment goes only to a banker, so it is credited to someone's bank account and can be traced.

In a special crossing (Section 124), the name of a particular bank is written across the face of the cheque, with or without the two lines. Then the drawee bank must pay only to that named bank, or to its agent for collection. A special crossing is safer than a general crossing because only one bank can collect.

A cheque can be crossed by the drawer when it is issued. Under Section 125, the holder of an open cheque can also cross it, generally or specially, and can add "Not Negotiable". A banker to whom a cheque is crossed can cross it specially to another banker for collection.

The Act recognises general crossing, special crossing, and the "Not Negotiable" crossing. An account payee direction is written as "Account Payee" or "A/c Payee only" along with the crossing. It is not a separate statutory crossing type. It is a restrictive direction added by banking practice, and courts have recognised it. It tells the collecting bank to credit the proceeds only to the account of the named payee. A collecting bank that credits it to someone else's account risks being held negligent. The cheque can still be negotiated, but the banker must be careful about whose account receives the money.

Bankers get statutory protection when they act properly. Under Section 128, a paying banker who pays a crossed cheque in due course to a banker, as the crossing directs (to any banker for a general crossing, to the named banker for a special crossing), is protected. The drawer is protected too: if the cheque has reached the payee, the drawer is treated as if the true owner had been paid. Under Section 129, a paying banker who pays a crossed cheque otherwise than as the crossing directs is liable to the true owner for the loss. So a crossed cheque paid in cash over the counter falls under Section 129. Under Section 131, a collecting banker who receives payment for a customer in good faith and without negligence is not liable to the true owner, even if the customer had no title or a defective title. Section 131 is a separate provision from Sections 128 and 129. The paying banker's protection depends on paying according to the crossing. The collecting banker's protection depends on good faith and no negligence.

Key formulas to remember

General crossing: Two parallel transverse lines (with or without "& Co." or "Not Negotiable"); Payable only through any banker, not over the counter.
Special crossing: Name of a specific banker written across the face (with or without lines); Drawee bank pays only to that named banker or its agent for collection.
Account payee direction: Crossing + "Account Payee" or "A/c Payee only"; Not a separate statutory crossing. It is a restrictive direction from banking practice that tells the collecting bank to credit only the payee's account.
Who may cross: Drawer, holder or banker; Under Section 123 a cheque may be crossed generally, and under Section 124 specially, as the drawer chooses. Under Section 125, the holder may cross an open cheque generally or specially, may make a general crossing special, and may add the words "Not Negotiable". A banker to whom the cheque is crossed specially can cross it specially to another banker for collection.
Not Negotiable crossing: Crossing + "Not Negotiable"; The cheque stays transferable, but the transferee cannot get a better title than the transferor had.
Paying banker's protection and liability: Section 128: payment in due course to a banker as the crossing directs = paying banker protected (and the drawer too, once the cheque has reached the payee). Section 129: payment otherwise than as directed = liable to true owner; Protection depends on paying according to the crossing.
Collecting banker's protection (Section 131): Good faith + no negligence + received for a customer = no liability to true owner; Protection applies even if the customer's title is defective. It is lost if the banker acts negligently, or collects for a person other than a customer.

How to solve Crossing of Cheques and Bankers' Protection questions

Use this method for any question on crossing or bankers' protection.

1Read the words and marks on the cheque. Note whether there are two lines, a bank name, "Account Payee" or "Not Negotiable".
2Classify the crossing: lines only is general, a named bank is special. "Account Payee" is an added direction about whose account to credit.
3Decide who can receive payment. General: any banker. Special: only the named banker. Account payee: only the payee's account.
4If the question is about a thief or finder, check whether "Not Negotiable" is present. If so, the transferee gets no better title than the transferor.
5If the question is about a paying banker, check whether it paid as the crossing directs. If it did not, it is liable to the true owner.
6If the question is about a collecting banker, check two tests: good faith and absence of negligence.
7Choose the option that matches the rule. Eliminate options saying a crossed cheque can be paid in cash.

Quickest way: Two-question shortcut

When to use it: Use for MCQs that ask what a crossing means or whether a banker is protected.

Ask 1: Is it a crossing question or a protection question?
For crossing: lines only means any bank, bank name means that bank, Account Payee means the payee's account only.
For protection: a paying banker must pay as the crossing directs. A collecting banker needs both good faith and no negligence.
Any option that allows cash payment over the counter on a crossed cheque is wrong.

Common mistakes in Crossing of Cheques and Bankers' Protection

Thinking a crossed cheque can be cashed over the counter.
Students mix up open and crossed cheques.
Fix: Remember: crossed means payment through a bank account only.
Treating "Account Payee" as stopping all transfers.
The words sound absolute.
Fix: It is a direction to the collecting banker about whose account to credit, added by practice. A banker who ignores it risks being held negligent.
Confusing general and special crossing.
Both involve a bank in the payment.
Fix: General has no bank name. Special has a named bank written across the face.
Saying "Not Negotiable" makes the cheque non-transferable.
The word sounds like a ban on transfer.
Fix: The cheque can still be transferred. The only effect is that the transferee gets no better title than the transferor.
Assuming bankers are always protected.
Students remember protection but forget the conditions.
Fix: A paying banker is protected only if it pays in due course as the crossing directs. A collecting banker needs good faith and no negligence.

Worked examples

Example 1

Ravi draws a cheque for ₹50,000 in favour of Meera. Two parallel lines are drawn on its face with the words "A/c Payee only". Which statement is correct? (a) Cash can be paid at the counter to the bearer (b) It is payable only through a bank, to be credited to Meera's account (c) It cannot be transferred in any manner (d) It is an open cheque

Show the solution

Two parallel lines mean the cheque is crossed, so it is not an open cheque. Option (d) is out.
Crossed cheques are not paid in cash over the counter. Option (a) is out.
The words "A/c Payee only" direct that the proceeds go to the payee's account.
Option (c) overstates the effect, because the words are a direction on whose account to credit.

Answer: (b) It is payable only through a bank, to be credited to Meera's account.

Example 2

A cheque crossed generally was paid by the drawee bank to a bank, which credited it to its customer Kiran's account. Kiran had no title to the cheque. The collecting bank acted in good faith and without negligence. Is the collecting bank liable to the true owner?

Show the solution

The collecting banker received payment for a customer, Kiran.
The bank acted in good faith.
The bank acted without negligence.
All conditions of the statutory protection are met, so the defect in the customer's title does not make the bank liable.

Answer: No. The collecting bank is protected and is not liable to the true owner. It would lose protection only if it had acted negligently or not in good faith.

Exam tips

Learn the crossing types as a trio: lines only, bank name, Not Negotiable. Treat Account Payee as an added direction.
For a collecting banker, always look for the pair: good faith and no negligence.
For a paying banker, check whether payment followed the crossing.
Watch for options that wrongly say a crossed cheque can be paid in cash or cannot be transferred.
"Not Negotiable" does not stop transfer. It only limits the title a transferee gets.

Practice questions from Negotiable Instruments Act, 1881

Crossing of Cheques and Bankers' Protection in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CS ProfessionalCrossing of Cheques

Crossing of Cheques and Bankers' Protection: frequently asked questions

What is the difference between general and special crossing?

In a general crossing there are two parallel lines and no bank name, so any banker can collect. In a special crossing a particular bank's name is written across the cheque, so only that bank can collect it.

What does an account payee cheque mean?

It means the money must be credited only to the account of the named payee. It is not a separate statutory crossing but a restrictive direction used in banking practice. A bank that credits another person's account risks being held negligent.

What is the difference between a crossed cheque and an open cheque?

An open cheque can be paid in cash at the counter to the person who presents it. A crossed cheque can be paid only through a bank account. This makes a crossed cheque safer against theft or loss.

When is a banker protected under the Negotiable Instruments Act?

Under Section 128, a paying banker is protected when it pays a crossed cheque in due course to a banker as the crossing directs, and the drawer is protected too. Under Section 129, the paying banker is liable to the true owner if it pays otherwise than as directed, for example by paying cash over the counter. Under Section 131, a collecting banker is protected when it collects for a customer in good faith and without negligence, even if the customer's title is defective.