BANKING AFFAIRS

Detailed explanation-1: -Ans: Since the RBI has issued strong instructions not to release a demand draft for more than 50, 000 in cash, banks may only accept a limit of 49, 999.

Detailed explanation-2: -Crossed Demand Draft The main purpose of Crossing a Demand Draft is the ensure that the payment is cleared by means of an account i.e. the payment is deposited in the Bank Account of the person in whose favor the DD has been drawn.

Detailed explanation-3: -50, 000/-and above should be issued by banks only by debit to the customer’s account or against cheques or other instruments tendered by the purchaser and not against cash payment.

Detailed explanation-4: -When a bank prepares a demand draft, the amount of the draft is taken from the account of the customer requesting the draft and is transferred to an account at another bank. The drawer is the person requesting the demand draft; the bank paying the money is the drawee; the party receiving the money is the payee.