Question

Answer briefly:
What is a Demand Draft?

Answer 1

A demand draft is a negotiable instrument similar to a bill of exchange. A bank issues a demand draft to a client, directing another bank or one of its own branches to pay a certain sum to the specified party. A demand draft can also be compared to a cheque. However, demand drafts are difficult to countermand. The drawer is the person requesting the demand draft; the bank paying the money is the drawee; and the party receiving the money is the payee. For example, a small business owner purchases products from another company on credit.The bank issues the draft, making it the drawee.