JAIIB 2020- Junior Associate of the Indian Institute of Bankers (JAIIB) is a coveted exam conducted by IIBF. The notification for this year JAIIB exam has been released. Applications are invited from the eligible candidates to apply for the exam. In this article, we will be discussing another important topic from Paper-2 “Accounting & Finance for Bankers” which is ‘Types Of Endorsement Cheque’.
If you want to know all the important sections and explanations of those sections then read out this article carefully without skipping a single word. We are also providing you with the video of our expert explaining these notes in more lucid language. You can also refer to the notes given below for the better understanding of this topic. So, mark this article if you are preparing for JAIIB 2020.
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Define Endorsement
Section 15- Meaning- signing on the face or backside of an instrument (or even on a paper called allonge or stamped paper).
Effect of endorsement
Section 50- The endorsement followed by delivery has the effect of transfer of property therein to the transferee, with right of further negotiation. Person signs and transfers-Endorser. Favour-Endorsee
Types of Endorsements
- Blank endorsements- If the endorser signs his name only, the endorsement is said to be in blank and it becomes payable to bearer. Blank endorsement can be converted to full endorsement by writing name of endorsee. This can be done by holder without his signatures by writing name above the endorser’s signatures.
- Special or Full endorsement- If the endorser also directs to pay to a certain person or to his order, endorsement is said to be be ‘in full’ or special endorsement. Eg. “Pay to Mr. Ramu or order”.
- Restrictive endorsement- When the endorser restricts further negotiation of instrument. For example if it is written that ‘Pay to Mr. Sambhu only’.
- Partial endorsement- In case, part payment of bill has been made and a note to that effect has been given in the instrument, it can be endorsed only for the balance unpaid amount. Otherwise, a NI can be endorsed for full amount and not for partial amount.
- Conditional endorsement- The endorser puts some condition along with endorsement. Say, pay to Mr Rohan or order on her attaining the age of 21 years.
- Sans Recourse endorsement- The endorser excludes his liability and in case of dishonor, endorser will not be liable for payment.
- Facultative endorsement- When the endorser gives up some of his rights under the negotiable instrument. Eg. “Pay Mr. Ravi or order, notice of dishonour waived”. In this case the endorsee is not required to notice of dishonour in case of dishonor and the endorser will be liable to the endorsee for the non-payment of the instrument, even if notice of dishonour has been given to him.
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