Commercial Applications
A bank draft is always dishonoured if there are insufficient funds in the drawer's account at the time of encashment.
- True
- False
Banking
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Answer
False
Reason — A bank draft cannot be dishonoured for insufficient funds because the draft amount along with commission is taken in advance by the bank from the sender at the time of issue. Since the bank itself has already received the money, the question of dishonour for insufficient funds does not arise. Dishonour for insufficient funds applies only to cheques, not to drafts.
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