BANK CHEQUE Meaning and
Definition
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A bank cheque refers to a monetary instrument issued by a customer or account holder of a financial institution, typically a bank, to effect a payment. It serves as a written order, commonly known as a check, directing the bank to pay a specific sum of money to a designated payee or recipient. A bank cheque is also referred to as a cashier's cheque, bank draft, or official cheque.
The issuance of a bank cheque involves withdrawing funds from the customer's account, resulting in a transaction that is considered as good as cash. The bank takes responsibility for making the payment on the instrument, guaranteeing its authenticity and securing the availability of funds associated with it. This ensures that the funds are directly debited from the customer's account instead of relying on their signature alone, providing an extra layer of security for both parties involved.
Typically, a bank cheque includes various essential details, such as the name of the account holder, the amount in figures and words, the name of the payee, the date of issuance, and the bank's logo and address. The customer can use a bank cheque for various purposes, including making large purchases, paying bills, settling debts, or sending money across different locations. A bank cheque is widely accepted by businesses and individuals as a reliable and secure method of payment due to its association with a reputable financial institution.
Etymology of BANK CHEQUE
The word "cheque" originated from the Middle French word "chequer", which means "to split" or "to divide". This term referred to the practice of splitting a piece of paper into two parts for use as proof of payment. In the early 18th century, the word was anglicized to "check" in British English and "cheque" in American English.
The word "bank" has its roots in the Old Italian word "banca" or "banco", which means "bench" or "counter". In medieval Italy, moneylenders and money changers conducted their business at benches or counters in marketplaces. Over time, these financial activities expanded, leading to the establishment of banks as institutions.
