Demand Draft

A demand draft is a negotiable instrument similar to a bill of exchange . A bank issues a demand draft to a client (drawer), directing another bank (drawee) or one of its own branches to pay a certain sum to the specified party (payee).
● A Demand Draft is payable on demand.
● A Demand Draft can NOT be paid to a bearer.
● A DD is negotiable and its features are similar to Bill of Exchange and NOT a Check.
● If a Bank fails to honor the Draft, the Bank is liable and not the person.
● If there are wrong signatures on the Bank Draft, the Bank is liable.
● If there is a prior arrangement , the DD can be payable by different bank also.

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Updated: December 18, 2017 — 9:50 am

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