SBI Demand Drafts Demystified: Everything You Need to Know for Hassle-Free Financial Transactions

Demand Draft is a way to initiate transactions from one bank to another. It is a negotiable instrument that can be issued only by the bank and not by any individual. It is mainly issued where the parties are unknown to each other. SBI Demand Draft is still used by many institutions like schools, colleges, examination conducting centres, etc., for application and admission purposes. 

It differs from cheques in that they do not require the signature of an accountholder to be cashed. They are very safe and have minimal risk of fraud as compared to cheques. This is because the bank issues the DD if the drawer has sufficient funds in the bank account. A drawer is a person requesting the demand draft, the bank paying the money is the drawee, and the party receiving money is the payee.

Features of SBI Demand Draft

Mentioned below are the features of the SBI DD:

  • DD is payable on demand
  • There is no stamp on a DD
  • Can be negotiated by endorsement and delivery
  • Not payable to the bearer
  • It cannot be stopped except by a court order
  • Amount is refunded if DD is not delivered
  • The purchaser of the DD need not be a customer of the bank

SBI Demand Draft Details

Mentioned below are the fields on an SBI Demand draft, and against them are the values they contain:

Field in the DDField Details
Bank BranchThe branch of the bank issuing the DD
To PayDetails of the Payee
DateDate of issue of DD (valid period is three months from this date)
Amount (in words)The amount payable to the drawee in figures
DD numberA unique number is assigned to the DD.
SignatureSignatures of the officers of the bank branch issuing DD

In earlier times, when net banking, mobile banking, credit cards, etc., were unpopular, people made loans and other payments by DD. People used to prefer DD over cheques because of the lesser risk involved. However, there is still some risk involved in DDs, which are as mentioned below:

  • A Demand Draft may be forged or stolen.
  • The bank issuing the DD may leave business before it is deposited and cleared.
  • The drawee may not deposit the DD on time; it may become invalid.
  • The drawer may have made a mistake while getting the DD.

DD Form

Like the SBI Form for NEFT, customers are required to fill out a DD Form issued by the bank: The fields of the same are mentioned below:

  • Name and Address of the drawer (your name)
  • Name of the drawee
  • Name and address of the payee
  • Name of the city where DD is payable
  • Amount payable to the drawee (in words)
  • Amount owed to the drawee (in figures)
  • Exchange (fee charged by the bank)
  • Total amount payable by the drawer to the bank (in figures)
  • Signature of the drawer
  • Name and Address of the drawer

How to Generate SBI Demand Draft

Mentioned below are the two ways in which the SBI demand draft can be generated:

  1. Offline Through Branches:

The application form is to be filled out in the mentioned format:

  • The beneficiary’s name on whom the DD is to be issued
  • The city/branch on which the DD is to be issued
  • The amount of the DD
  • The service charge of the bank (as per the service charges for the respective amounts)
  • The person requesting the DD
  • Signature of the depositor (note that the depositor can be different from the applicant)

Step 1: Fill out the details as mentioned above.

Step 2: Pay either via cash or from the bank account.

Step 3: The bank will then verify the details mentioned in the DD Form.

Step 4: After verification and receipt of money, the bank issues the DD to the applicant.

Step 5: Submit the DD to the payee to proceed further.

  1. Online Through SBI’s Official Website:

Mentioned below is the process to issue SBI DD online:

Step 1: Log in to the SBI official website using net banking credentials.

Step 2: Click on the “Payments/Transfers” tab.

Step 3: Now, click on “Issue Demand Draft”.

Step 4: Select the bank account from which the amount will be debited.

Step 5: Enter the amount of the demand draft.

Step 6: Enter the “Name of the Beneficiary”.

Step 7: Enter the Branch Code where the demand draft is payable.

Step 8: Select the DD Delivery mode.

SBI Demand Draft Charges

Mentioned below are the SBI Demand Draft Charges:

Demand Draft Issue and AmountCharges
Up to INR 5,000INR 25 (including GST)
Above INR 5,000 and up to INR 10,000INR 50 (including GST)
Above INR 1,00,000INR 4 (including GST) per INR 1,000
Min. INR 600 (including GST)
Max. INR 2,000 (including GST)
DD Cancellation or Issuance of Duplicate DDINR 200 + GST
Demand Draft Cancellation ChargesUp to INR 500 – NIL
Above INR 500 and up to INR 5,000 – INR 25 + GST
Above INR 5,000 and up to INR 10,000 – INR 50 + GST
Above INR 10,000 – INR 100 + GST

How to Cancel an SBI Demand Draft?

At present, there is no provision to cancel the SBI DD online; one must visit the bank and get the DD cancelled. There are two cases where a customer can cancel a sanctioned DD: 

  1. When cash has been paid for the demand draft
  • If the cash return for a DD has been offered, visit your bank’s branch ASAP. Submit the actual DD along with the cash payment receipt.
  • The bank will now accept the DD, and money will be instantly offered. However, the whole amount won’t be returned. SBI DD cancellation charges will be applicable. These cancellation fees are also valid for other banks as well.
  1. When money has been offered from the account for a demand draft
  • Fill out the DD cancellation form available at the bank’s branch.
  • Fill out all the necessary information required in the concerned form.
  • Submit it together with the original demand draft at the bank. 
  • The amount will then be refunded back to your bank account.
  • Also, a certain amount would indeed be deducted as cancellation fees.

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