Difference Between Cheque And Bank Draft

According to Section 131A of the Negotiable Instrument Act-1881, the Drafts are at par with the cheques in case of crossing. It means that Draft is similar to a cheque for the purposes of crossing. Despite that, the following are the differences between the two.

1. A Draft is always payable to the 'order' while a cheque may be payable to the bearer.
2. The payment of Draft cannot be stopped (countermanded) except in cases where the draft is reported lost.
3. In case of a cheque, the drawer can get payment of a cheque stopped, if he so likes.
4. The banker has a direct liability to pay a Draft because purchaser of the Draft has already paid the money to the drawer bank and there is a clear direction from drawer branch to the drawee branch for payment of the money to the payee named therein or crediting to his order.
5. The banker has indirect liability in case of a cheque while the primary liability lies with the drawer of the cheque. The banker will make payment of the cheque only when it has sufficient funds of the drawer with it for payment and the cheque is otherwise in order.