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Definition

Bank Drafts

A bank draft is an order from one branch to another branch of the same bank to specified sum of money to the person named there in or to his order.

A person who wants to send money can buy a draft by paying the required amount from a bank and send to another who can encash it in his place. Banks issue drafts for a nominal commission. The commission depends upon the amount to be remitted. This service is extended to public in general. The purchases of the draft need not be a customer to account holder of the bank.

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