LECTURE:7

Demand Draft, Cheque, money, currency

Demand Draft, Cheque,

Money,Currency
1 . Demand draft and cheque: Demand drafts and banker's cheques are almost the same. In
both cases, you pay the money in advance to get this. Both are used for transfer the
amount between two accounts of same or different Bank. So you may consider both as
something a pre-paid stuff. Unlike with ordinary cheques, here the amount is assured by
bank. There is no fear of something being dishonored.
2. Difference between demand draft and cheque: When you give the DD to someone, he/she
tries to get it encashed or deposited to account. If the account is in a branch of same bank, (e.g.
you gave a Citibank demand draft and the receiving person also has Citibank account) it gets
cleared in that branch itself. So finally the Demand Draft get's cleared in any branch of the
issuing bank.
Banker's cheque goes the same way until the clearance part. Banker's Cheque is to be cleared
in the very specific branch of the bank that issued it. That is, if the Banker's Cheque is issued
at Bangalore branch of Citibank, it will finally get cleared in Bangalore branch. But this is not
the user's worry. Bank takes care of it once you submit the cheque to any of their branches. An
important difference between the two is that a draft can be issued only when the amount of the
draft is submitted to the bank. Whereas a cheque can be issued irrespective of whether there is
balance in the issuer's account or not. Incase there is no balance in the issuer's account at the
time when the cheque is presented to the bank for encashment, the cheque will get bounced.
3. Money and currency: Money is anything that is generally accepted as payment for goods
and services and repayment of debts. Currency is the metal or paper medium of exchange that
is presently used.
Attachments:

Reference:www.google.co.in

Prepared by MBA\MRS R.CHITRA[ASSISTANT PROFESSOR\TSBA004]

27/11/09