Define: Bank Draft

A bank draft is a payment instrument issued by a bank on behalf of a customer, guaranteeing the payment of a specified amount to a designated recipient.

To obtain a bank draft, you need to provide the bank with the amount you want to send, the recipient’s details, and pay the corresponding fees. The bank will then issue a draft, which can be deposited or cashed by the recipient.

Bank drafts are not considered legal tender, but they are widely accepted as a secure form of payment. They are often used for large transactions or when the recipient requires guaranteed funds.

Generally, anyone with a bank account can purchase a bank draft. However, some banks may have specific requirements or restrictions, such as minimum account balances or identification verification.

The validity period of a bank draft varies depending on the bank’s policies. Typically, it ranges from 90 days to 180 days. After the expiration date, the draft may no longer be honored, and you may need to request a new one.

In most cases, a bank draft cannot be canceled or stopped once it has been issued. This is because the funds are already guaranteed by the bank. However, you should contact your bank immediately if you suspect any fraudulent activity or if the draft has been lost or stolen.

Yes, banks usually charge a fee for issuing a bank draft. The fee amount may vary depending on the bank and the amount of the draft. It is advisable to inquire about the fees beforehand to avoid any surprises.

If a bank draft has not been used or deposited by the recipient, it may be possible to request a refund from the issuing bank. However, this process may involve additional fees and require proper documentation to prove ownership of the draft.

Yes, bank drafts can be used for international transactions. However, it is important to consider any currency conversion fees, exchange rates, and potential delays in processing when using a bank draft for international payments.

If your bank draft is lost or stolen, you should immediately contact your bank and provide them with all the necessary details. They will guide you through the process of reporting the incident and potentially issuing a new draft if necessary.