GENERAL KNOWLEDGE

Detailed explanation-1: -Demand Draft also known as DD is a type of pre-paid negotiable instrument in which a drawee bank usually becomes a guarantor in order to make full payment when this instrument is presented. A unique feature of Demand Draft is that it cannot be dishonored as the payment is made beforehand.

Detailed explanation-2: -(1) A “negotiable instrument” means a promissory note, bill of exchange or cheque payable either to order or to bearer.

Detailed explanation-3: -Negotiable Instrument means a promissory note, bill of exchange or cheque.

Detailed explanation-4: -Banker’s cheque (Pay Order)-This is a document that instructs a bank to pay a certain sum to a third party. Such orders are normally acknowledged by the bank which provides a guarantee that the payment will be made. It is a kind of bank draft that is payable within the town so it can be called a local bank draft.