Bank draft negotiable instrument Act 1881.pdf

bank draft, parties and features

1. BANK DRAFT
Presentation
by:Faseeha.Fayyaz

2. DEFINITIONS OF BANK DRAFT:
According To Negotiable Act 1881 Section 8A:
“Draftis an order to pay money drawn by one of a
bank upon another office of the same bank for a sum
of money payable to order on demand.”
General Definition:
“Bank draft is an unconditional order of payment written by
one bank to another or by one branch of bank to the other
branch.it contains the instructions to the other bank or
branch to pay on demand the amount of draft to the
payee/nominee.

3. How Does A Bank Draft Works?
Before creating a bank draft bank
verifies that does the coustumer
have sufficient funds available.
The holded fund by bank creates
bank draft for account holder.
Bank draft is often used when large
amount of money is involved or
when there is a high risk that
cheque could be dishouner.

4. Features Of Bank Draft:
Negotiable instrument.
Name of draft issuing bank/branch.
Date of issue.
Payee’s name.
Amount of draft.
Same drawer and drawee bank.
Unconditional order.

5. Advantages Of Bank Draft:
Guaranteed availability of funds.
More safer.
More convenient
Provide fund in many currencies
Reliable instrument.
Finances both foreign and domestic trade.

6. THANKYOU!!
I hope that it will be helpful for all of you!!