There are two types of bank instruments: negotiable and non-negotiable. Negotiable instruments include cheques, bank drafts, bills of exchange, and promissory notes. Cheques can be open, bearer, order, or crossed for safety. Crossed cheques are not cashed over the counter and can only be deposited into the payee's account. Cheques can be dishonored for reasons like insufficient funds, discrepancies in amounts, or if reported lost or stolen. Bank drafts are similar to cheques but issued by a bank, guaranteeing payment from the drawer bank.

1. INSTRUMENTS OF
BANKS

2. TWO TYPES OF INSTRUMENTS
NEGOTIABLE INSTRUMENT
•THE INSTRUMENT WHICH ARE
TRANSFERABLE.
NON NEGOTIABLE INSTRUMENT
•THE INSTRUMENT WHICH ARE NOT
TRANFERABLE

3. NEGOTIABLE INSTRUMENT
CHEQUE BANK DRAFT
BILL OF
EXCHANGE
PROMISORY
NOTES

4. CHARACTERISTICTS OF NEGOTIABLE
INSTRUMENTS

5. CHEQUE
An order to a bank to
pay a stated sum from
the drawer's account,
written on a specially
printed form

6. PARTIES OF CHECK

7. Specimen of cheque

8. Types of cheque
1. Open cheque
2. Bearer cheque
3. Order cheque
4. Crossed cheque

9. Open Cheque
The cheque that are paid
across the counter of the
bank .open cheque may
be bearer o order.

10. Bearer Cheque
If the drawer orders the
bank to pay money to
person who presents the
cheque for the payment
is called a bearer

11. Order Cheque
An order cheque is always
payable only to a certain
person .the name of payee is
written on the cheque. Bank
pays the check after proper
identification of the payee.

12. Crossed Cheque
Crossed cheque are those cheque which is crossed by drawer for
safety purpose these cheques are not enchased at the counter of the
bank .at can only credited the account of payee.
Crossing can be in two ways
1. General crossing
2. Special crossing

13. Crossed Cheque

14. Crossed Cheque
General Crossing
 In this crossing, two parallel lines on
the top left corner of the cheque
with or without words” not
negotiable” or” & co” or “payee
a/c only
Special Crossing
 In this crossing the name of bank is
written between two transverse
parallel lines with or without words”
not negotiable” or” & co” or
“payee a/c only”

15. Causes of Dishonor of Cheque
Bank dishonor cheque on the ground of certain if the reasons.
 If bank balance is less than the amount of cheque
 If the amount written on cheque in words and figure is different.
 If the cheque is reported as lost/stolen after this information bank stops
its payment.
 If the person becomes unsound mind the notice is given to the bank
after this notice bank stops its payments.

16.  If court order the bank to stop payment of any account
 If the person declared insolvent by the court
 If the cheque is torn bank refuse payment
 If drawer not mention the date then bank refuse its payment
 Notice of the death of customer is received bank refuse to pay
 If the cheque is mention before the date mention on it.
 If the cheque becomes outdated after six months of its date of issue bank refuse
to pay
 If the signature of drawer is not matched with specimen signature bank refuse its
payment

17. Bank Draft
A type of check where the payment is guaranteed to
be available by issuing bank. Typically, banks will
review the bank draft requester's account to see if
sufficient funds are available for the check to clear.
Once it has been confirmed that sufficient funds are
available, the bank effectively sets aside the funds
from the person's account to be given out when the
bank draft is used.

18. Specimen Of Bank Draft

19. Difference between Cheque and Bank draft
Cheque Draft
 Issue by individual
 Drawn by account Holder
 The Drawer And Drawee
are both different.
 A cheque can be
dishonor for a want of
sufficient balance in the
account.
Bank Draft
 Issue by bank
 Drawn by Bank to
another Bank
 The Drawer and Drawee
are the same bank.
 A bank draft cant be
dishonor Because
payment is certain.