Multiple choice

A customer requests the banker to issue bearer demand draft. The banker should

  1. issue the bearer demand draft by striking the word 'order' and writing the word 'bearer

  2. refuse to issue the same

  3. request the customer to go the head office

  4. request the head office seeking permission

Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Banks generally refuse to issue bearer demand drafts due to security and fraud prevention concerns. Bearer instruments can be cashed by anyone holding them, creating money laundering and theft risks. Bank drafts are typically issued as 'order' instruments payable to a specific payee, with 'bearer' strictly avoided.

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