Write note on bank draft ? What is the difference between draft and cheque

BANK DRAFT :-
It is a written order by one branch of bank to another branch of the same bank to pay certain sum of money on demand to the person named.

 
Features of Bank Draft :-

1. It is conditional order for payment.

2. It is drawn by one branch to another branch.

3. The bank of the two branches will be same is payable on demand.

4. It is payable on demand.

5. The amount specified is written on it.

6. The name of specified person is also written on it.

7. It bearer signature of the issuing authority.

8. Branch code number is also written on it.

9. It bears no stamp.


Advantages of Bank Draft :-

1. It is very useful for trade.

2. It is useful for the settlement of debts.

3. It is a reliable credit instrument for remitting money.

4. The payment of draft through telegraphic transfer (T.T) is made with in a few hours.


DIFFERENCE BETWEEN CHEQUE AND DRAFT :-

1. In case of draft, the banker has direct liability to pay while in case of cheque banker will pay if the sufficient amount is available in the account.

2. A draft can not be made payable to the bearer. A cheque can be drawn by the bearer.

3. A banker is bound to pay the draft money while cheque payment can be sloped by the drawer.