A cheque is a special type of bill of exchange.

A ‘cheque, is a bill of exchange drawn on a specified banker, expressed to be payable only on demand (Sec.6).

Although a cheque is a bill of exchange, yet is have two additional characteristics, namely:

(i) A cheque is always drawn on a specified banker with whom the drawer has deposited the money;


(ii) It is always payable on demand.

Thus all cheques are bills of exchange but all bills of exchange are not cheques.