A Cheque leaf, commonly called a Cheque is a tool which is used to transfer funds from one bank account to another. A bundle of Cheque leaves attached together is a Cheque book which is provided by the bank to their customers.
What is a Cheque Leaf?
A Cheque leaf is a financial instrument that instructs a financial institution such as a bank/non-banking financial institution (NBFI) to pay the amount of money mentioned in the Cheque from the drawer’s account to the drawee so that it can be transferred in the payee’s account. A Drawer is the person who has written the Cheque. A drawer has a transaction-enabled bank account through which he/she conducts the transaction. The person who receives the money mentioned in the Cheque is called a Payee. The Payee’s bank is called a Drawee. Both the Drawer and the Payee can be a person or an entity such as a company.
A Drawer can transact using a Cheque because he/she has a transactional banking account. This account is also called a Current account, a Cheque account or a Checking account. This account is where the drawer has kept his/her money. The Cheque usually includes the following things: Monetary amount to be transferred and the name of the person (payee) who will receive it. The Drawer also has to sign the Cheque, in process, ordering his/her/its bank to pay the payee the amount of money mentioned on the Cheque, on or after the date mentioned on the Cheque.