In banking practice, what is meant by a crossed cheque and how must it normally be paid?

Introduction / Context:
Cheques remain an important payment instrument in banking. Customers and bank staff need to understand different types of cheques and the effects of crossing, dating and endorsement. A crossed cheque is a basic but frequently tested concept in interviews and exams. This question asks for the correct meaning of a crossed cheque and how it is normally paid by the bank.

Given Data / Assumptions:

• We are dealing with a cheque drawn on a bank account.
• Two parallel lines are typically drawn on the face of a crossed cheque, sometimes with words such as account payee.
• The question focuses on the mode of payment, not on dishonour or post dating.
• Normal banking regulations and clearing procedures apply.

Concept / Approach:
A crossed cheque is one that bears across its face two parallel lines, with or without additional words. The effect of crossing is that the cheque cannot usually be paid in cash to a bearer at the counter. Instead, the collecting bank must credit the proceeds to a bank account, which adds a layer of safety and traceability. The correct option must mention both the visual mark of crossing and the requirement that payment be routed through a bank account rather than over the counter in cash.

Step-by-Step Solution:
Step 1: Recall that crossing a cheque is mainly a safety measure to prevent misuse if the cheque is lost or stolen. Step 2: Look at option A, which states that there are two parallel lines and that the cheque must be paid into a bank account. Step 3: Compare this with option B, which describes a dishonoured cheque due to insufficient funds, not a crossed cheque. Step 4: Compare with option C, which refers to encashment in cash at the issuing branch, again not the effect of crossing. Step 5: Reject option D, which focuses on post dating and staleness rather than crossing.

Verification / Alternative check:
As a quick check, imagine a business writes a cheque and draws two parallel lines with the words account payee only. When the payee deposits it, the collecting bank sends it through clearing and credits the payee account. The cheque cannot normally be cashed by any bearer at the counter. This behavior matches the description in option A and does not match the other options, confirming that option A is correct.

Why Other Options Are Wrong:
Option B is wrong because a cheque with insufficient funds is described as dishonoured or bounced, not crossed. Option C is wrong because a crossed cheque is specifically not meant to be encashed in cash over the counter; it should go through an account. Option D is wrong because a post dated or stale cheque refers to the date written on the cheque and the validity period, which is a different concept from crossing. None of these alternatives describe the visual crossing with two parallel lines and the requirement to route payment through a bank account.

Common Pitfalls:
One common mistake is to assume that any cheque that is not payable in cash is crossed, even if other restrictions apply. Another pitfall is to confuse crossing with account payee instructions, although these often appear together. Learners may also mix up returned cheques for insufficient funds with any special marking on the cheque. Always associate a crossed cheque with the two parallel lines and the rule that payment is to be made only by crediting a bank account.

Final Answer:
A crossed cheque is a cheque on which two parallel lines are drawn and which must be paid only into a bank account and not encashed over the counter.