Relationship: Payee of a Draft

PPB Banker-Customer Relationship Free JAIIB Capsule 40 views Updated 23 Sep 2026

Capsule FREE

PPB · Banker-Customer Relationship

What relationship exists between the bank and the payee of a demand draft before the draft is presented for payment?

Tap to flip and reveal the answer

The Bank is the Trustee, and the Payee is the Beneficiary.

The bank holds the funds specifically for the beneficiary. In a known case, if a bank fails before a purchased draft is paid, preferential refund applies.

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Relationship: Payee of a Draft — Full Text

What relationship exists between the bank and the payee of a demand draft before the draft is presented for payment?

Answer

The Bank is the Trustee, and the Payee is the Beneficiary.

Additional notes

The bank holds the funds specifically for the beneficiary. In a known case, if a bank fails before a purchased draft is paid, preferential refund applies.

Part of Principles & Practices of Banking · Banker-Customer Relationship · Last updated 23 Sep 2026

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