Multiple choice

A demand draft is purchased by P. After 5 days, P comes to the bank and requests the bank to stop the payment, as the DD is reported to have been lost in transit.

  1. The issuing branch will immediately instruct the drawee branch to stop the payment of DD.

  2. The issuing branch will first verify the non-payment and then give the instructions for stopping the payment.

  3. The payment of DD cannot be stopped and hence, the request of P will not be entertained.

  4. If it is a common request from payee and drawee branchs, it will be done.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The payment CANNOT be stopped unless there is an order by a competent court. So, when a draft reaches a payee, the relationship between the purchaser and bank comes to an end. Therefore, the request of P will not be entertained.

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