PARTIES OF CHEQUE

by • 17/06/2011 • 2nd year BankingComments (0)438

The cheque has three principal parties as under:

Drawer: It is the person who issues the cheque by signing it to a person named therein. In face, the drawer issues the order to the bank to pay a certain sum of money to him or to his order.

Drawee: It is the person in whose favor the cheque is drawn. He is usually the receiver of the amount of the cheque but he can transfer it to another person by endorsement. In such a case the cash will be received by the endorsee (to whom the cheque is transferred).

Bank: It is a third principal party involved in the cheque and receives the order of the drawer or endorser and acts upon it. It pays the amount mentioned in the cheque to the payee.

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