Payment of interest on lost draft
Din Dayal
(Querist) 15 July 2013
This query is : Resolved
I GOT A DEMAND DRAFT FROM SBI IN FEB. 2010, VALID UPTO AUG 2010 .DUE TO OVERSIGHT OF PAYEE , IT WAS DISCOVERD 3 YRS LATER THAT IT HAS BEEN LOST AND NOT ENCASHED. AFTER SUBMITTING NECY. INDEMNITY TO BANK , DUPLICATE DRAFT ISSUED IN APRIL 2013 .MY CLAIM FOR INTEREST FOR 2YRS 6 MONTHS (SEP 10 -MARCH 13 )REJECTED BY THE BANK . IS IT FAIR . AFTER ALL , BANK HAS USED THE MONEY IN THEIR OPERATIONS FOR TWO AND A HALF YEARS .I I HAVE BEEN WRONGED . I REQUEST FOR A REPLY /REMEDY / SUGGESTION FROM AN EXPERT .
Advocate Bhartesh goyal
(Expert) 16 July 2013
One can not take advantages of his own wrong.Bank can not be held guilty for the wrongs/negligence done by you.
malipeddi jaggarao
(Expert) 16 July 2013
You should be happy that the Bank could trace the record and issued duplicate DD after such a long time after completing all formalities by you. There is no provision of payment of interest for duration of purchase and encashment. Basically you should understand that Demand Draft is a time liability for the Bank and not term liability. For such liabilities bank has earmark the amounts for immediate payment. The name itself is Demand Draft and payable on demand. How does the bank know when the demand will be made? Your claim is not tenable. It is a facility extended by the Bank as a mode of transfering the funds. Nowadays many people use NEFT/RTGS for immediate transfer and the importance of Demand Draft has become minimum. Be happy that the Bank has given you duplicate demand draft. No interest is payable and your claim is not tenable.
V R SHROFF
(Expert) 16 July 2013
interest not payable to you. Bank not liable for ur mistake. no provision
Advocate Sastry
(Expert) 16 July 2013
Mr. Malipeddi Jagga Rao has correctly explained about the claim for interest... I agree with his views
Din Dayal
(Querist) 16 July 2013
I am grateful to Mr Jagga Rao for his immediate response.While the fault is certainly not of the bank, has the bank not utilised the money in operations ?.logic of keeping aside the money on demand is only upto validity of the draft ?All funds in saving accounts are always on demand any time .Why should the banks pay interest on such balances.Similiarly banks pay reduced rate of interest on premature withdrawl form time deposits .Why? None of the terms of issue of drafts specify such stipulations. In fact, terms of issue of draft are not available in public domain.Could somebody find these terms ?Mr. Jagga Rao may please review in light of my comments.How should I proceed further ? Regards.
Advocate Sastry
(Expert) 16 July 2013
Dear Din Dayal,
As per Banks policy, amounts received on account of Demand Drafts cannot be deployed for earning interest.. The amount is a liability for the Bank... The DD can be presented within three months of issue... After three months they do not know when the Applicant will come for renewal of DD or for refund of cash...There is no point on which you can argue...
Rajendra K Goyal
(Expert) 16 July 2013
The draft amount is demand liability, purchaser has not entrusted it for use in operation, he has only entrusted for payment on demand. Saving and Term deposits are otherwise.
There exist no guidelines to pay interest on demand draft from RBI or any other regulator. No Bank would pay interest on demand draft in absence of such instructions, rules or guidelines from some regulator or otherwise.
malipeddi jaggarao
(Expert) 16 July 2013
What ever views expressed by me cannot be reviewed. They are based on both law and practice of banking. What guidelines you want from Banks regarding Demand Drafts. Banks will certainly not expect that the DDs purchased are lost. They are equivalent to cash. If you lost cash, are you going to claim on RBI Governor? You should be happy that since it is Demand Draft, you can get back your money. If it is cash, you can not. Asking the experts to review their stand simply to support the unreasonable claims are not tenable. I advise you to drop this issue without making further comments and wasting your valuable time as well that of experts.
Din Dayal
(Querist) 16 July 2013
Thank you Mr. Jagga Rao for clarification . By review , I never meant to offend an expert .I am indeed sorry .
