ChequesKristýna Nevolová

Cheque

•Check – in American English

•Abide by the act number 191/1950, act about cheques and drafts

•It is a document, by which the drawer (owner of the current account) unconditionally order the drawee (bank) to pay a sum of money from his account to the owner of the cheque

Cheque

•Compulsory requirements:▫Designation that it‘s a „cheque“▫Order to pay an amount of money – „pay

against this cheque“▫The name of the drawee (who has to pay)▫Place, where should be pay▫Date and place where the cheque was

made out▫Signature of the drawer

Subjects

•Drawer – ask (order) the bank to pay a sum of money

•Drawee – bank which pay the sum of money form the current account of the drawer

•Payee – someone to whom has to be pay

•Drawer drawee payee

The History of cheques

•In the past – very important means of payment

•Since 1948 – using of cheques was limited•After 1990 – the original importance didn

´t return•Nowadays cheques are used only

exceptionally

Repayment

•The law determine the maturity at sight – after submitting to drawee.

•The cheque should be submit at the latest: In the same state – 8 days Two different states – 20 days Two different continents – 70 days

Kinds of cheques•By the person payee

Cheque to orderCheque on nameCheque to owner

•By the drawer Bank cheque Private cheque

•Special kinds of cheques Cheque to be cleared Travel cheques

Kinds of cheques•A) cheque to order

there is notice „to order“ or „transferable by endorsement“ – the owner can write a new person on the back side of the cheque

•B) cheque on name there has to be name of the person whom will be pay. The name of payee. „Without endorsement“

•C) cheque to ownerif there isn‘t name. The sum of money will get the person who submit the cheque

Crossing

•Cheques are usually printed with two lines which are called the crossing.

•A crossed cheque means that the money can only be paid into a bank account.

•If the cheque is crossed „Account payee“, it can only be paid into the account of the person named on the cheque

Cheques with crossing

The drawer

•Bank cheque The drawer is a bank, the drawee is

another bank Very high quality

•Private cheque legal person (corporate) or private person

Special kinds of cheques

•Cheque to be cleared Can‘t be repay in cash, only transferred to

the current account•Travel cheque

Travel cheque

•Use in international tourism•The well known drawers – VISA, American

Express

•Requirements: Designation that it is a travel cheque Order or promise to pay the sum of money

to a payee Name of the drawer and his signature

Travel cheques

•Different using: before the journey client buy travel

cheques in his bank He sign these cheques before the employee

of the bank In foreign country the client sign the travel

cheques again in front of the employee of the repaying bank

The signatures have to be identical

Travel cheque

Advantages and disadvantages

•Advantages- You don‘t have to carry large amounts of

cash with you- Your money is on a bank account where it

is safe from loss or theft- It can be done anywhere without going to

a bank- It minimize a risk of loss or theft of huge

amount of money

Advantages and disadvantages

•Disadvantages­ The bank cheques are quite expensive –

about 300 CZK for the make out­ The private cheque could be bad cheque

and it‘s very difficult to check it. Issuing the bad cheque is offense (criminal act) and the bank doesn‘t repay it

­ For using cheques is necessary to have much more money on your current account

Questions

•Which kind of cheque isn‘t abide by the act number 191/1950 act about cheques and drafts? And in which act is abide by?

•Are bank cheques used more by private clients or by corporations?

•Why aren‘t cheques popular in Czech Republic?

More disadvantages

•Long time between transmit and repayment – days or weeks

•Fee connected with cash the cheque