Demand drafts and other forms of payment instruments are slowly losing their importance in the banking industry. This is mainly due to the onset of the digitisation era which has opened a plethora of options to transfer funds without the need of physical financial instruments such as cheques, demand drafts, and money order, among others.
That said, the use of demand drafts is still in use by several businesses and educational institutes as it is still considered one of the most secure modes of transferring funds. In this section, we learn the process to cancel a DD.
How to Cancel a Demand Draft
Once the DD is issued by the bank after you pay by cash or by deducting the amount from your account, if the need arises for the cancellation of the DD, visit the bank from which the draft was issued. You may have to write an application addressing the bank or branch stating the need for the cancellation.
Below are two types of the DD cancellation processes:
1. Demand Draft Issued Upon Paying Cash: If the DD was issued based on cash payment, you’ll have to submit the demand draft along with the receipt of the cash payment. The cash will be refunded with certain charges towards the services of cancelling the DD. Note, some banks may require you to affix a revenue stamp on the DD to validate the cancellation.
2. Demand Draft Issued Upon Amount Deducted from your Account: You’ll need to fill the DD cancellation form and submit it along with the original DD. The amount will be credited into your account after the bank deducts the cancellation charge.
If the demand draft has expired and has not been encashed by the payee, the amount is not automatically credited back into your account. You’ll have to write an application to the issuing bank for revalidation of the DD. The bank will re-validate the draft, which is again valid for 3 months, and then you can cancel with the process mentioned above, or you could use the DD again to transfer funds.
Check about Demand Draft
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