All of us are aware that Banks ask us to wait for ‘ DD clearance’ for payment of Demand Drafts issued in our favor.
Some clear it within a couple of days while some others take even a week.
When demanded forcefully like asking them to give in writing that they are awaiting DD clearance before they pay out, you are paid immediately.
Demand Draft means..RBI definition is here below.
By definition the Banks should immediately release funds with out waiting for clearance.Banks levy a charge for DDs for this facility, which is higher than Checks.There is no logic in waiting for clearance.
Curiously RBI is silent on this issue.
You may use the following links for guidance for ALL your Banking transactions..
http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=508
http://www.rbi.org.in/scripts/FAQView.aspx?Id=51
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Sl. No |
Term |
Details |
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Cash |
Cash payment is the most common payment system which is well known. |
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Cheque, demand draft, payment order, banker’s cheque |
Paper based payments are in the form of cheques, demand drafts, payment orders, banker’s cheques, refund orders, warrants etc. These are also referred to as negotiable instruments. For simplicity, they are generally referred to as cheques. i. Cheques are simply a payment instruction from the account holder to his/her banker directing that a certain sum of money should be paid to a specific individual or to the bearer of the instrument. On receipt of cheques, the beneficiary will deposit it with his banker who will collect the money through clearing house system, where banks in a city exchange cheques with one another and settle the payments by arriving at a net amount of payables and receivables. After exchange of cheque, the account of the issuer of the cheque is debited and the credit is passed on to the banker of the beneficiary. An account holder should ensure that a cheque is issued only when there is sufficient balance of funds in his/her account. Cheques drawn on any bank in the country can be cleared through various mechanisms available in the clearing system. The process usually takes 2 to 4 days depending on the local clearing house procedures. In India, cheques are valid for three years from the date of issue. However, cheques are treated as stale, by practice, by banks after since months from the date of issue, but they can be revalidated by the issuer. Dividend warrants and interest warrants issued by companies are also treated as cheques which are usually valid for three months from the date of issue. In case of a cheque, the beneficiary is entitled to receive the money due only if the balance is available to clear the cheque. However, there are some pre-paid negotiable instruments eg. Demand drafts / payment order / banker’s cheques. ii. Demand drafts are used when one person wants to send or transfer money (remit) to another person who is in another city. The person wanting to send money, deposits cash in a bank or issue a cheque in favour of the issuing bank, which issues him a demand draft. The demand draft is sent to the person who is to receive the money. The receiver gives it to the branch/bank where he holds an account and receives the payment. They are valid for 6 months. Banks normally charge a commission for issuing demand drafts. iii. Payment orders or Banker’s Cheques are similar to demand drafts but are usually issued for payments within a city. These are usually valid for 3 months. Banks may charge a commission for issuing Payment Orders and Banker’s Cheques.. |
