1 Amendment of Bills of Exchange Act 1882: non-transferable cheques.

After section 81 of the Bills of Exchange Act 1882 there shall be inserted the following section—

“ 81A Non-transferable cheques.

(1) Where a cheque is crossed and bears across its face the words “account payee” or “a/c payee”, either with or without the word “only”, the cheque shall not be transferable, but shall only be valid as between the parties thereto.

(2) A banker is not to be treated for the purposes of section 80 above as having been negligent by reason only of his failure to concern himself with any purported indorsement of a cheque which under subsection (1) above or otherwise is not transferable. ” .

2 Amendment of Bills of Exchange Act 1882: protection to banker and drawer where cheque is crossed.

In section 80 of the Bills of Exchange Act 1882 (protection to banker and drawer where cheque is crossed) after “crossed cheque” there shall be inserted “ (including a cheque which under section 81A below or otherwise is not transferable) ” .

3 Amendment of Cheques Act 1957.

In section 4(2)(a) of the Cheques Act 1957 (protection of bankers collecting payment of cheques, etc ) there shall be inserted after the word “cheques” the words “ (including cheques which under section 81A(1) of the Bills of Exchange Act 1882 or otherwise are not transferable) ” .

4 Citation and commencement.

(1) This Act may be cited as the Cheques Act 1992.

(2) This Act shall come into force at the end of the period of three months beginning on the day on which this Act is passed.