Demand draft is one of the most used financial instruments for transferring money offline. It is a pre-paid instrument so there are zero chances of a demand draft getting dishonored. It works in a manner where you have to pay the amount of demand draft to the bank initially and then the DD is drawn in favor of the payee. When the payee submits this demand draft, the amount is disbursed in the payee’s account. In many transactions, it may happen that the drawer wants to cancel the demand draft.
A demand draft is drawn by deducting money from your account and the transaction for the same is done immediately. If for some reason you need to cancel the demand draft and get the money credited in your account then you will have to go back to your bank’s branch from where you had got the demand draft issued.
Generally, the demand draft is cancelled for reasons like-wrong printing of payee details, demand draft used mistakenly or any other plausible reason. The DD cancellation cannot be done online. Few banks do offer online application for demand draft but you have to visit the bank for collecting the DD. Bank may even arrange for home delivery of your DD but for cancellation of a demand draft, you have to visit the branch from where you have applied for it.
Procedure for the Issue of Demand Draft
The purchaser of the DD shall fill up the application as prescribed by the bank with all the details such as in favour of whom the DD is issued, amount of DD in figures and words, payee branch and full address of the purchaser. Once the form is submitted and amount paid, the DD is issued.
However, the demand draft can be cancelled as well. In case you have to cancel the demand draft, you can follow the steps mentioned below:
When you have the Original Demand Draft
When you hold the original demand draft, cancellation is easier. There are two possibilities while cancelling a demand draft and they are as under:
- If you have applied for demand draft by paying the amount in cash, firstly you need to submit the original DD along with receipt of cash payment. After submitting the DD, the amount of demand draft will be given to you in cash. A certain minimal amount would be deducted as a cancellation charge.
- If you have applied for demand draft by paying the amount by cheque then in this case you need to return original DD along with duly filled DD cancellation letter. The amount will then be credited to your account by deducting certain cancellation charge.
When you do not have the original Demand Draft
This scenario comes into effect when you have lost the demand draft. For cancelling and getting refund of a lost demand draft, it is cumbersome as it involves submitting of indemnity bond on stamp paper. After receiving the indemnity bond, the bank deposits the amount back to your account. Some banks may wait till the expiry of the demand draft and then do the credit in your account but crediting of the account takes time in this case.