Demand draft is one of the most used financial instruments for transferring money. Demand draft is a pre – paid instrument so there are zero chances of a demand draft getting dishonoured. Demand draft 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 favour of the payee. In many transactions it may happen that the drawer wants to cancel the Demand Draft. So, below is a guide to know more about Demand Draft Cancellation.
Demand Draft is drawn by deducting 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 back in your account then for this you will have to go back to your bank branch from where you had applied for the Demand Draft. Generally the demand draft is cancelled for reasons like: Wrong printing of payee details, demand draft used mistakenly or any other plausible reason. Normally 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 Demand Draft you have to visit the branch from where you have applied for it. Following are the ways through which the demand draft can be cancelled:
When you have 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 then 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 then will be credited to your account by deducting certain cancellation charge.
When you do not have original Demand Draft: This scenario is when you have lost the demand draft. The process of getting the refund in this case is a bit tedious. For cancelling and getting a refund of a lost Demand Draft 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 kindly note that crediting of the amount will take time in this case.
Letter of DD Cancellation:
While writing to bank for cancellation of demand draft remember that your letter must be precise and should clearly state the reason for cancellation of the demand draft. Following are certain tips for writing a perfect DD Cancellation Letter:
- The tone of letter must be formal as this is an official letter. So draft a letter which is formal in its tone and language
- The formatting of the letter should be done professionally
- There should be clarity in the overall idea of the letter. The subject should clearly express the content of the letter
- Address the letter to the manager of the branch from where you have applied for the Demand Draft because the demand draft can be cancelled only by the person who has applied for it and from the branch through which it was applied
- Carefully add all the details of the demand draft in the letter so that it is easy for the bank to carry out the cancellation
- Mention all the details of demand draft like the DD number, amount of DD, the date on which it was drawn and most importantly mention the reason for cancellation of demand draft
- Also mention your account number in the letter in case you have paid by cheque while applying for demand draft else mention that it had been applied in cash and attach the cash receipt for banks consideration.
- Make a formal request explicitly to the branch manager in the letter for cancellation of the demand draft
- End the DD cancellation letter with your signature and mention your name in detail along with your account number
In this manner a DD cancellation letter must be written. For getting better knowledge and understanding of the same, find below a sample of DD cancellation letter. The sample would help in getting clarity of the manner in which a DD cancellation letter should be written.
(Date of DD cancellation letter)
To,
The Branch Manager,
(Name of Bank),
(Name of the Bank Branch)
(Address of the branch)
Subject: Cancellation of Demand Draft No (Demand draft number) dated (date of demand draft) for Rupees (amount of the demand draft) favouring (Name of the person in whose favour it was drawn) drawn on (name of payee bank branch) due to the reason (mention reason for cancellation of DD).
I request you to, credit the proceeds in my account (account number) with (branch name [this is to be mentioned if the DD is applied by way of cheque]) branch / make cash payment to me.
Further I allow bank to recover the prescribed charges, if any, towards cancellation of my demand draft.
Thanking you in anticipation
Yours Sincerely,
[Signature]
(Full name of the applicant)
(Address)
(Contact number)
Thus a DD cancellation letter must be written in formal language and should be clear in terms of reason for cancellation of the demand draft. Moreover it should mention all the details required by the bank to carry out the cancellation procedure. In recent times few banks provide a printed format letter for cancellation of demand draft. You are only required to fill in the details of the demand draft and submit it to the branch and get your DD cancelled.