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Ankit (Querist)

21 December 2009 What is difference between
1) Banker cheque
2) demand draft
3) Pay order

and if there is no diff. why we use different terms?
Thanks

CA SURENDRA KUMAR RAKHECHA

CA SURENDRA KUMAR RAKHECHA (Expert)

21 December 2009 1. Generally an accountholder issue the cheque. But in some cases; where the account is not held; then a person may approach a bank and deposit money into that bank togetherwith some applicable charges. In turn; banks issue cheque in the favour of a desired person by the applicant. This is made when local payments are made.

2. A person may have bank account or not. By depositing in the bank or having money in the account; he fills in an application form with payment of money and charges and thereby takes a cheque from the bank (same as above 1) but which one is payable outstation. This is known as demand draft the payment of which is made by the another branch of the same bank situated outside from the city.

3. Pay Order and Banker Cheque is same.

ANIL JANGID

ANIL JANGID (Expert)

21 December 2009 AGREE

Murtaza I Bhagat

Murtaza I Bhagat (Expert)

21 December 2009 totally agree

CA Ravi Sisodia

CA Ravi Sisodia (Expert)

21 December 2009 agree

Ankit

Ankit (Querist)

22 December 2009 It means Banker cheque & pay order is for local clearing and Demand draft is for outstation clearing.

Another qus.:-
1) Why there is requirement of "PAYABLE AT" while making a DD/PO/BC, when at present most (not all) banks have CBS system?

2) Is it necessary for receiving person to have a/c in the bank, which issue the DD/BC (Issuing Bank)?

Thanks

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