What Does Travellers Cheque Mean?


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These cheque are drafts which are issued to tourists. These are used for noncommercial purpose and these are drawn by the holder on the issuing bank for round sums. These are specialized cheques made available to overseas travellers and converted into the currency of the country of destination. Travelers' cheques are issued in several denominations in a local or foreign currency. The issuing bank accepts the return of unused cheques at a little commission. At the time of issue, the holder signs the cheque in the presence of the manager of the issuing bank and then the cashing bank; and the two signatures must agree. Travelers' cheques can only be issued after fulfilling exchange control regulations set by the central bank of a country.

These cheques are issued to businessman who wants to make purchases abroad but are reluctant or afraid to carry with them huge amount in cash. These cheques are accompanied by necessary shipping documents. Cheques are bills of exchange drawn on a banker payable on demand. They are instruments used to withdraw money deposited in the bank. Cheques must fulfill certain conditions without which their status as cheques will not be legally accepted and they would be liable to be dishonored.

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