Hot Student Stories
top-5-grammar-and-spelling-checkers-to-rock-in-2019

What is the difference between demand draft and crossed demand draft?

Karen Wright

in Student Loans

follow
followin
1 answer
2 views

1 answer


Zach Chandler on November 22, 2018

Explanation 1: Demand Draft is a bank instrument . In any case, if it isnot crossed, it is bearer of meaning in such a way that the carrier, anyonewho is the presentation to the bank can get in charged . However, if we turn over the cross, is of two parallel lines in the DD of the top left, itbecomes crossed . This means that the benefit of that DD can be takenonly after getting it credited to the recipient's account only. Bycrossing the carrier of the ship goes, so the one who has signed the chequeor because the DD is for sure that you are going to the particular personand the particular person can be tracked down, since it was first tohis of your account . That is why a crossed draft is also chalk"of the Account of the beneficiary." Explanation 2: If it is through a bank draft only an account holder can be in cashthe same. It is usually safer than the normal bank draft. Assume you take a draft for 100 dollars in favour of Mr. ABCD. If not the cross, the Lord ABCD can cash without having a bank account. However, if the cross is the money will go only to a bank account. So any time you can prove that you had indeedpaid the Lord ABCD. Another added benefit is in case the project islost, any body with the same name can claim the cash. So you get two benefits : added security as well as aproof. Q: Can a draft not issued as cross by the issuing bank be crossed later? R: Yes. Under Section 125 of theNEGOTIABLE INSTRUMENTS ACT, 1881, a holder of the cross. Further, holder of the cross in general, and especially alsoadd words "not negotiable". A demand draft is always an order instrument. The definition of ademand draft under Section 85A of the Indian Negotiable InstrumentAct, 1881, makes it clear that the demand of the project is a orderinstrument. In view of this, the problem of demand draft payable to abearer is STRICTLY PROHIBITED under article 31 of the Reserve Bankof India Act. If the demand draft is payable to the bearer itbecomes as a currency note, and In India only RBI is empowered toissue a currency note. Therefore, a DD is always made payable to the orderof a person and no DD is issued payable to bearer. The crossing is an indication to the banker that it should be paid onlythrough a banker. In other words, the cash will not be paid over-the-counter. The payment will be made through an account of the beneficiary.The main purpose of a crossing is to make sure that the amount of thecheque is paid to the correct beneficiary or endoresee and therefore helps inpreventing payment to a claim of the person. Thus, the purpose ofcrossing is to ensure the safety of the amount. Therefore preventswrongful people to get the amount of the check. IF the demand draft is not crossed, payment will be made by thebanker subject to the correct identification of the beneficiary. If the DD iscrossed, the amount of the DD will be paid to the beneficiario'sacccount.


Add you answer