Bank Draft

Overview

The Bank Draft is an instrument issued by a bank, directing the bank to unconditionally make a payment to the beneficiary or bearer upon presentation, based on the actual settlement amount.

Benefits

Bank drafts issued within the system are paid at sight; settlement surplus is refunded automatically; transferrable by endorsement during validity; drafts bearing the word "cash" allow inter-city cash withdrawals.

Procedure

1. The payer fills out the Settlement Application Form and affixes the seal at the designated area. If the payment requires a password entry, payment password should be set and written at designated area.

2. The bank reviews the completed Settlement Application Form and issues bank drafts based on the application.

3. The payer delivers the draft to the beneficiary, who in turn, presents the draft to the paying bank for payment.

FAQs

1. How to apply for a bank draft?

The customer fills out and affixes his/her seal on the Settlement Application Form. Indicate the word "cash" in cash draft cases. The bearer then fills out the pay-in slip and presents it to the paying bank for payment along with the draft (with seal affixed) and the remittance arrival notice.

2. How long is the validity of a bank draft?

The presentment period of a bank draft is 1 month following the date of issuance.

3. Does a bank draft allow cash withdrawal?

The bank draft bearing the word "cash" allows cash withdrawal. But if the applicant or beneficiary is an entity, Cash Draft will not be permitted.

4. How to get a bank draft refund?

The applicant should provide reasons to the issuing bank and present identity certificate or other certification. In addition, the draft and the remittance arrival notice should be surrendered.

5. How to report the loss of a bank draft?

The loss of a bank draft bearing the word "cash" and specifying the paying bank may be reported. To report loss to the paying or issuing bank, the party losing the draft should fill out and submit the Notice of Loss and Payment Suspension to the bank. Within three days of giving the foregoing notice, the party losing the draft may apply to the People's Court for Public Notice or file a lawsuit with the People's Court. After receiving the Notice of Loss and Payment Suspension, and confirming non-payment of the draft reported lost, the payer or paying bank should suspend payment immediately. The payer or paying bank will no more be liable if payment has been made to the bearer before receipt of the Notice of Loss and Payment Suspension. If the payer or paying bank does not receive a notice of payment suspension from the people's court within 12 days upon receipt of the Notice of Loss and Payment Suspension, the payer or paying bank will no longer be liable if the bearer presents the draft for payment and the payment is in turn made to the bearer starting from the 13th day.

The bank will not accept any loss reporting of a transfer draft that has specified the beneficiary entity or self-employed individual. But the paying bank and the issuing bank may assist in preventing risks.

If payment or refunding is required for a lost bank draft, the party losing the draft must provide documentary evidence concerning his/her rights to the draft and the actual settlement amount that is issued by the People's Court.