At par cheque,
When someone receives a Crossed/ Account payee cheque, he has to sent it to his banker for clearing and depositing the cheque amount to the credit of his bank account. After that his bank has to sent the cheque to the issuing bank branch to get the money. There may be some clearing charges depends on the distance of the depositor’s bank branch to issuing bank branch. These charges are called Cheque clearing charges. Now the question is whom to bear these charges, Cheque issuer or receiver. It depends on the cheque type. If it is a at par cheque then the cheque receiver will get full sum credited to his bank account and clearing charges if any will be borne by cheque issuer.
If it is not a at par cheque, then cheque receiver will get only net sum “Cheque amount less clearing charges” credited to his bank account and It means clearing charges if any will be borne by Cheque receiver.
In short, at par cheque, is the type of cheque against which the cheque receiver will get full cheque amount credited to his bank account even if his bank is located in the city different from the city of cheque issuer. Clearing charges if any will be borne by Cheque issuer which will be debited in his bank account along with the amount of cheque.
For example Mr. X of Allahabad has to pay Rs.50000/- to Mr. Y of Panipat. Mr. X issued an account payee cheque of Rs. 50000/- in the name of Mr. Y. For clearing of this other city cheque,bank of Mr. Y, charge some clearing charges. Assume clearing charges are Rs. 200/-. Now if the cheque is at par cheque then Mr. Y will get Rs. 50000/- credited in his account. But if this cheque was not at par cheque, then Mr. Y will get only Rs. 49800/- credited in his account.
That’s why people ask for at par cheque in place of normal cheque.
At par cheque,