Demand Draft
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This document provides information on demand drafts (DD), including: 1. Definitions of DDs under the Negotiable Instruments Act and key features such as being payable to order and not bearer. 2. Security features that should be present on DDs such as unique tracking numbers. 3. Relationships and responsibilities involved in DDs between the purchaser, payee, and bank. 4. Policies for stopping payment, issuing duplicates, handling simultaneously presented originals and duplicates, and validity periods. 5. Guidelines for addressing situations like an unsigned DD, customer requests for duplicates without indemnity, old RBI drafts, and bearer DDs.
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Demand Draft
- 2. • • • • • • • Definition NI Act 85(A) Payable to order on demand Not made payable to bearer Features similar BOE Bank Failure Signature on Demand Draft Prior Arrangements 2
- 4. • • • • • • Security Features in DD OT, TT, OL, TL 0, 1, 2, 3, 4, 5, 6, 7, 8, 9 stationery Crossing Demand drafts (Cheques) 4
- 5. • • • • Relationship purchaser payee Stop Payment of Demand Draft (purchaser, Payee, Bank, Court) Cash Receipt/Payment Duplicate Demand Draft (Purchaser, Payee) 5
- 6. • • • • • Payment of Duplicate/original Presented together Original is already Paid If duplicate is already paid Original presented before the duplicate 6
- 8. • • How do you handle a situation where 1. A Demand draft issued by your other branch is presented through clearing is unsigned 2. Customer is not ready to give an indemnity bond but he wants the duplicate Demand Draft 3. RBI Draft brought by your Customer is 8 months old. Can you make the payment? 4. Customer comes and demands for bearer Demand draft when cheques are issued why not DD 8
- 9. • • A person not having account with the branch presents a Demand draft for Rs 5000 on the counter . What is reaction ? A Demand draft presented for payment where issuing branch name is missing. What is your reaction ? 9