Demand Drafts

 

Demand Drafts: A demand draft is an order to pay money drawn by one office of a bank upon another office of the same bank, or upon an office of a different bank for a sum of money payable to order on demand, when the order is on another branch of the same bank, it is really a cheque but is nevertheless ordinarily called a draft. 




When a draft is issued on another bank, it has all the characteristics of a bill of exchange (except that it is not stamped and not accepted) as defined by this section. Even if it is drawn upon another branch of the same bank, it can be treated as a bill of exchange as the conditions stated in this section are satisfied. However, a demand draft is nothing more or less than a negotiable instrument governed by the provisions of this Act, and on the face of it, the obligations it creates are nothing more than ordinary debts.

Mayank Rai

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