GOVERNMENT ACCOUNTS, ACCOUNTING PROCEDURES AND OTHER MISCELLANEOUS MATTERS -- VOLUME 4 CHAPTER: A.2.

DEMAND DRAFTS, MAIL TRANSFERS AND TELEGRAPHIC TRANSFERS SECTION: A DEMAND DRAFTS A.1. DRAFT LEAVES A.1.1. All Demand Draft (DD) leaves should be kept in the dual custody of the Deputy Manager and an Officer authorised by the first line Manager . At the end of each day the joint custodians should ensure that all the DD leaves utilised for the day have been properly accounted for and further verify that all the unutilised leaves are intact. A.1.2. Operational staff are advised to note that our bank's DD leaves are designed with certain in-built security features to ensure operational efficiency and also to take care of the preventive vigilance requirements. The salient features are furnished here below for the guidance of branches and Regional Offices. A single new design DD format has been introduced with effect from 1st February 2009 with the following features. Since then issue of Demand Drafts in the old format of leaves is prohibited . The existing prefix reading as 98/MDD/O stands deleted. Column hitherto existed for incorporating details of remittance i.e., Cash/Transfer/Clearing on the face of DD leaf is dispensed with. Issue branch name with code number, EC type and check digit are preprinted. DD number consisting of nine digits is printed horizontally on the top with the font of the digits in the MICR format. Water mark of our banks name viz. Indian Overseas Bank followed by banks logo has been inscribed and such water mark will be visible when viewed through light rays. Our bank's name viz. Indian Overseas Bank appears at six places in two rows (three in each row in Hindi and English alternately) with banks logo in middle encircled by a special animation design in yellow colour and the same can be viewed through ultra violet lamp. The cages for OT, TT, OL and TL are positioned on the left side just above the MICR band . The line appearing just above the authorised signature is having a security check i.e., Indian Overseas Bank repeated in micro types and will be visible when viewed through magnifying glass. Since February 2007, a circular hologram was hot stamped by security printers at the printing stage itself. The hologram is affixed in the lower middle portion of the DD just above the MICR band. The name of drawee branch of our Bank in Hindi and English is printed on the top left side on the face of DD and positioned one below the other to provide space for hot stamping the Hologram. Thus, Bank's name in Hindi is shifted upwards so as to be in line with the word 'To' and Bank's name in English is printed just below the Hindi version. j) The hologram contains following features:INDIAN OVERSEAS BANK written in English and Hindi with Banks logo in the centre.

A picture of our Central Office main building is printed at the centre. Indian Overseas Bank and :Good People to Grow With printed in slanting position at the bottom. Indian Overseas Bank written in circles away from the core centre. A spiral design is positioned in the centre. IOB written in English and Hindi in Micro text inside Banks logo. Three flying birds at the top right side. Chain like design in semi circular shape at the top. The diameter of the hot stamped hologram is fifteen mm. A.1.3. Branches, Extension Counters, Regional Offices and Departments at Central Office should use the new Demand Drafts with hologram. Branches, Extension Counters and all other offices are prohibited from borrowing/ supplying DD leaves from/ to other Branches/ Extension Counters/offices. Branches/ Extension counters and other offices are advised to place their indent depending upon their consumption pattern well in advance say six months to their respective Regional Office. A.2. APPLICATION FOR DD/MT/TT An application for a Demand Draft in F.46A or Mail Transfer in F.40 shall be taken as per the requirement of the purchaser. If an application is received by letter, the date of the letter will be entered in the form, all particulars of which will be authenticated by a supervising official, the letter then being pasted to the voucher on record. Applicants for Telegraphic Transfer should however be required to sign the standard form whenever possible, but action on written instruction should not be delayed on this account. Branches while accepting applications for purchase of DDs of smaller value (particularly by cash) are required to make enquiry and satisfy themselves as to the genuineness of the purchaser and the purpose of purchasing of small value DDs. A.3. TRANSFER FROM CONSTITUENTS ACCOUNT A.3.1. In order to effect debit to a constituents Account, the application must be accompanied by a cheque in favour of our bank or a letter authorising to debit the account towards the amount of Demand Draft/ Mail Transfer/ Telegraphic Transfer and the Bank charges. The cheque or the letter of authority should be signed by the person(s) authorised to operate the Account. A.3.2. Where a cheque is not enclosed to Request-cum-Authority Letter for DD/TT/MT but DD/TT/MT application (F.46A or F.40) is available, after due verification of the authenticity of such letter, branch should prepare a separate debit voucher with advice and the Request-cum-Authority Letter should be marked and preserved securely attached with the voucher so prepared. A.3.3. A Demand Draft/Mail Transfer/Telegraphic Transfer may also be issued against a Letter of Request authorising to debit the account towards the amount of Demand Draft/Mail Transfer/Telegraphic Transfer and the Banks charges even if not accompanied by an application in F.46A or F.40 and in such a case the Demand Draft/Mail Transfer/Telegraphic Transfer voucher also shall be prepared by the branch. A.3.4. In exceptional cases, however, a Demand Draft/Mail Transfer/Telegraphic Transfer shall be issued as per complete details furnished on the cheque itself (duly authenticated by the Drawer), even if the application is not signed by all the authorised person(s).

A.3.5. The tendering of a cheque in favour of the Bank is no authority to make remittance on the instruction of a third party by the debit to the drawers account and it follows that, when two or more signatures are necessary for operation on an account, the application must be signed by the requisite number of parties authorised to operate even if it is accompanied by a cheque which is properly signed. A.4. ADVICE TO CONSTITUENTS Particulars of all DDs which are issued by debit to constituents accounts and handedover or despatched to third parties must be immediately advised directly to the constituents and not through their messengers. A.5. DELIVERY OF DRAFTS Drafts should be delivered against the recipients acknowledgment on the reverse of the relative application forms and delivered on the same day. In other cases, the acknowledgment should be taken either on the reverse of the form or in a local delivery book specially maintained for the purpose. A.6. ISSUE BRANCH NAME AND CODE NUMBER A hole in the relevant digit-cage on both the right and left side of the instrument should be punched with the help of punching plier. Under no circumstances, the digitcage should simply be crossed with pen. Particular care must be taken to see that all the draft forms in use are branded with the name of the branch with code number before issue, if it is not already printed thereon. A.7. SPOILT DRAFT LEAF When a form is spoilt in preparation, the fact must be noted in the office copy of Demand Drafts Issued Register (DDR 1 ) under the authentication of the Deputy Manager or an Officer authorised by the First Line Manager who will himself / herself destroy the spoilt form. The portion bearing the printed serial number of the spoilt draft in question, should be neatly cut and pasted in DDR 1 of date. A.8. DDR SYSTEM A.8.1. Under Demand Drafts Reconciliation (DDR) System, DDs should be issued to the credit of the DDR account (GL Code 2005) . Particulars of all DDs issued on a particular day should be recorded in Demand Drafts Issued Register (DDR-1). Regarding payment of DDs the same should be paid to the debit of DDR account after recording the particulars in Demand Drafts Paid Register (DDR.2). A.8.2. Before authenticating a DD, the signing official should check the recordings in DDR-1, verify the DD on hand and ensure that, the DD number, paying branch name and code, issuing branch name and code, date of issue and amount both in words and figures are correctly recorded, the appropriate security cages both on the left hand and right hand side of the drafts are properly punched and they are as per DD application form. DDs of value less than Rupees Fifty thousand only are to be issued under one authorised signature. The single signatory to the DD for value less than Rupees Fifty Thousand should block-out the space meant for the second signatory (in relevant column of "Authorised Signatories" on the DD leaf) by means of a square rubberstamp (of Revenue-stamp size) reading as X . This is a preventive vigilance measure and the single signatory's compliance is required prior to the delivery of DD to the

purchaser. DDs for amounts of rupees Fifty thousand and above, should bear two authorised signatures. A.8.3. As regards drafts issued by Extension Counter Officer and other branches having single officer, each draft should be less than rupees Fifty thousand only. A.9. NO DRAFT ADVICE REQUIRED A.9.1. Under New DDR System, no advice need be prepared. The draft should be prepared with carbon impression on the reverse of it. Care should be taken to record correct code number and name of the paying branch both in the draft and in DDR-1 . Regarding branches coming under the CCO centres, DDs must be drawn on the respective Central Clearing Office. A.9.2. Branches are not permitted to draw DDs on any of the branches coming under the CCO centres. The DDs so drawn on CCOs are payable at all local branches attached to the respective CCO. In case customer wants the DD to be issued on a specific branch within such CCO centre, issuing-branch should draw DD draft on CCO and also incorporate on the DD the name of such specified branch. For this purpose, the issuing branch should indicate the name of the branch in red ink on the top right-hand side of the draft as " Also payable at .............................. branch". The paying branch should follow the usual procedure laid down for payment of drafts. A.9.3. DDs/MTs/TTs by Overseas Branches Payment of DDs/MTs/TTs issued by our overseas branches is delinked from FETS from 1st October 2001. The procedure is the same as in the case of payment of DDs/MTs/TTs drawn by Indian branches. Overseas Branches (except Colombo) will issue Indian Rupee DDs and MTs on CCOs only in CCO centres. A.9.4. Payment of DDs drawn on CCOs Core Branches located in Core CCO centres have to pay DDs / MTs by accessing their CCO / DDR module through core net work. In such cases branches should not debit Local DD Reimbursement Account (GL Code.2520). A.9.5. Payment of drafts drawn on branches (a) The paying / drawee branches functioning in non-CCO centres should pay the DDs drawn on them only to the debit of DDR account in their books and ensure that the debit is recorded in DDR Paid Summary DDR 2. (b) In case of rupee TT received from our Overseas branches, the concerned branch should debit their TT Payable account after ensuring that the cypher is tallied and credit beneficiary's account and wait for IBSA from Treasury (Foreign) Department, Central Office. The paying branch need not submit any claim. If TT payable entry is not eliminated within seven days, branch should contact Treasury (Foreign) Department, Central Office for obtaining IBSA/CMP-4. A.10. ISSUE OF DEMAND DRAFTS A.10.1.The Officer assigned with the role function of issue of DDs should authenticate a DD after ensuring the compliance to the following essential particulars : a) Name of drawee- branch and code number thereof b) DDR running serial number c) Date d) Specimen signature number is entered correctly. DDs should not be signed by officers

on probation who do not hold Power of Attorney as their signatures are not circulated and not available for verification. The authorised signing officials must put their Specimen Signature Number beneath the signatures on the DD and desist from indicating their names below the signature on the DD. e) Punching of appropriate cages is done meticulously with the plier and the punched holes are clear and without any hinges to check fraudster from meddling with the cages as also to prevent giving scope for inflating the value of the DD. Branches are cautioned that marking of cages with pen (or by any other method other than punching by plier) should never be resorted to, lest it defeats the very purpose of cage mechanism. f) Amount in words and figures are written legibly and correctly. A.10.1.1. The DD Issuing-branch should arrange to paste transparent selfadhesive tape of standard quality on the figures of value of DD written on each DD issued. The tape should be securely pasted by the clerical-staff who writes the DD (both manually and through system) in the manner specified, before placing the same i.e. the Demand Draft instrument to the Authorised Signatory for his / her verification and signature. A.10.1.2. Such affixing of adhesive tape should never be done on the Payee's name, amount of DD in words and other features of DD. The Authorised signatories to the DD should ensure the pasting of tape on the figure of value of DD before putting their signatures. A.10.1.3.The single signatory to the DD for value of less than rupees Fifty thousand should block-out the space meant for the second signatory ( in relevant column of "Authorised Signatories" on the DD leaf ) by means of a square rubberstamp of Revenue stamp size reading as X . A.10.1.4. Issuing branch should exercise vigilant caution when requests for multiple drafts of small values are received ( particularly by cash ) and ensure verification of the identity of the purchaser. A.10.1.5. Computerised branch having DDR package, while issuing drafts should ensure that the checksum is generated by the system. A.10.1.6. Branches should not issue drafts on Administrative Offices. However, Administrative Offices are permitted to issue DDs on their CCO/Local Branch for making payments. A.10.2. Demand Drafts / Mail Transfers / Telegraphic Transfers for Rupees Fifty thousand and above should be issued by branches only to the debit of concerned customers account and not against cash payment. Similarly payment of Drafts / Mail Transfers / Telegraphic Transfers for Rupees Fifty thousand and above should be routed through the account maintained by the beneficiary with a bank and not in cash. Single draft for value less than rupees Ten lacs only may be issued by branches headed by Chief Manager. Regarding issue of single DD of value rupees Ten lacs to less than rupees Ten crores, branches should take up with IBR Division, Central Office through their Regional Office furnishing the details and obtain prior permission. Branches headed by AGM and above cadre are authorised to issue single DD of value less than rupees Ten crores. In other words, at branches, no single DD can be issued for the value of rupees Ten crores and above. A.10.3. Branches are advised to note that for DDs of Rupees Fifty thousand and above,

the applicant must furnish Income Tax Permanent Account Number and it should ensured that this information is provided in the DD application form. A.10.4. The Drafts should invariably be crossed before handing over to the customer except in cases where specific request has been made for an uncrossed draft. A.11. DDR.1 (DD Issue summary) The system generated DDR-1 should be compiled for each day. The days total of DDs issued should be made at the end of the day and recorded. Unused space of DD issue column, if any, in DDR-1 for the day should be blocked for security reasons by drawing two parallel lines. The day-end total of DDs issued as reported in DDR-1 through system generated report should be taken to Day Book as credit for DDR Account in General Ledger. A.12. PROCEDURE AT PAYING BRANCH A.12.1.When our Banks draft is presented at the paying branch for payment it should be verified for safety checks by the officer-in-charge and handed over to the clerk for necessary accounting. A.12.2. The safety checks are: (a) the draft whether issued in the new design format and has the name of the issuing branch and code number. (b) the DD should have a preprinted nine digit number (c) punching at the right hand side for the correct digit code and at the correct security cage on the left hand side of the DD. (d) Signatures of the officers of the issuing branch must tally with the specimen on records (e) Draft must have the carbon copy impression on the back. However this not applicable for a computer generated draft. (f) words and figures of the amount of DD must tally (g) DD is neither post/anti dated nor out of date and bear the date of issue A.12.3. Utility Programme for viewing DD issue details. All branches covered by the network and Central Clearing Offices will be able to use this utility programme named DDR ISSUE which is available in IOBONLINE under "Product Links". A detailed user manual for using the program is available in the "User Manuals from Information Technology Department, Central Office" on IOBONLINE. Whenever a draft is presented for payment, the Supervisory staff should use this facility and cross-check the DD details. The actual transaction for effecting the payment has to be done in the system as per instructions in force. After the payment of DD the user at the paying Branches / CCOs should note to opt "Mark Paid" to enable alert mode to the subsequent enquiry for the same DD by other users. A.12.3.1. Usage of DD view programme User-staff are advised to note that this facility is an additional supporting tool. The details available to the user through this utility programme will facilitate verification of issue details. The decision to honour or otherwise pertaining the DDs shall be taken based on such verification and other guidelines relating to safeguards to be taken at the time of payment of drafts put in place by Central Office. Branches in CCO Centres while making payment of drafts drawn on their CCOs should also opt the "Mark Paid" button to indicate the draft as paid. When these drafts are

processed at CCO, the user at CCO will get a message "CAUTION: Draft Already Marked as Paid by .. (branch name)", if the draft was processed already and paid by a branch. A.12.3.2. This utility programme is available only to Supervisory Staff of branches / Central Clearing Offices. To enable the login, branches should contact their respective RCCs with the roll number of the Supervisory Staff attached to their branch. Once the RCC registers the users, authorized supervisory staff can login to the system. Users logging in for the first time should change their password immediately and then proceed for enquiry of draft details or else the system will not allow them to proceed further. This password should be kept secret and should not be divulged to anybody under any circumstances. In as much as the utility entirely relies upon the data received from all the networked branches, it is the responsibility of all Networked branches to ensure that the "data file" transfer at the time of "Application Shutdown" is successful every day. In case of failure, branches should send the data through the utility specifically provided for File Transfer to Regional Office / Central Office. It is reiterated that this programme is a supplemental tool (like checksum) available to networked branches which would enable them to cross-check the details of a particular DD when the same is presented for payment and satisfy themselves as to its genuineness. Branches are advised to note that non-availability of this facility as well as the data, for any reason whatsoever (like loss of connectivity) cannot be a basis for non-honouring of DDs if they are otherwise found to be in order. Networked branches/Extension counters and CCOs are required to make best use of this facility to guard against payment of fake/fraudulent drafts. A.12.4.Branches are advised note the additional Preventive Vigilance measures as detailed below. Operational staff while handling DDs at branches / offices are required to meticulously comply with the following instructions. (a) Paying branch should continue to ensure scrupulous observance to the operational instructions governing payment of DDs put in place by Central Office while effecting payment of DDs. (b) Paying branch should verify whether the transparent tape affixed on the Figures' of the value of DD by the issuing branch is intact and that it does not contain additional tape one on the other. (c) Paying branch should continue to verify the issue details on-line or contact the branch over phone wherever necessary. (d) The Passing Authority at the Paying branch should ensure strict adherence to the to the following instructions pertaining to Pre Passing and Post-passing procedures. (d.1.) Payment of Demand Drafts : Pre Passing Compliance d.1.1. The Passing Authority should subject all the Demand Drafts to ultra violet lamp scrutiny. In respect of Demand Draft of value more than Rupees Twenty Five Thousand, as a record for having verified under ultra violet lamp, the Passing Authority should affix, after due verification, a rubber-stamp reading as UV Verified on the reverse side of the Demand Draft under authentication with date. d.1.2. On getting warning messages if any, prompted by the computer system while verifying checksum of a Demand Draft, the Passing Authority should make discreet

enquiries about the discrepancy and ensure the genuineness of Demand Draft. A comprehensive record of such enquiries should be incorporated on the reverse side of the Demand Draft by the Passing Authority under authentication with date. It should be noted that tallying or non-tallying of checksum alone cannot be the deciding factor for paying or rejecting a draft. d.1.3. The appearance of security-band in the form of wavy-boxes with the words Indian Overseas Bank inscribed, on the body of Demand Draft leaf should be ensured by the Passing Authority. d.1.4. Passing Authority should continue to verify the issue particulars in all cases of Demand Drafts of value exceeding Rupees One Lac and such other Demand Drafts as deemed fit through IOBONLINE wherever available and record such verification details on the reverse side of the Demand Draft under authentication with date. (d.2.) Payment of Demand Drafts : Post Passing Compliance d.2.1. Passing Authority is required to follow-up and obtain written confirmation within forty eight hours of transaction wherever any oral clarification has been obtained from the DD issuing-branch on a reference made while effecting payment. d.2.2. Passing Authority should record the details of enquiries made and the response of Demand Draft issuing branch, on the reverse side of Demand Draft under reference, without omission, under authentication with date. d.2.3. Branches and Controlling Offices are required to note that the Pre-Passing and Post-Passing procedures put in place as Preventive Vigilance measures are to help the Operational Staff to strengthen the process of verification of the day-to-day transactions, and to ensure the correctness / genuineness of the Demand Drafts while processing them for payment. d.2.4. Regional Offices are advised to verify during branch visits, compliance to the PrePassing and Post-Passing procedures by branches through random checks and ensure that the above instructions are adhered to by all the branches under their control on an on-going basis. A.12.5. The Paying authority at branch should exercise due alertness to pick-up any warning-signals while verifying the Demand Draft presented for payment and should never hesitate to seek clarification if need be, from the issuing branch. Paying branches are cautioned not to overlook the Preventive Vigilance measures both in-built and manual, put in place by Central Office as any dilution in compliance is likely to lead to serious operational risks besides putting the bank to financial loss. A.12.6. In terms of the software devised by our Information Technology Department, Central Office, under DDR package while issuing each DD a unique check-sum arrived by the system is incorporated on the DD with the prefix "CS. At the time of making payment, the system would cross-verify the check-sum. A.12.7.During branch visits, Officials from Regional Office should undertake test-check of few paid Demand Drafts to verify branch compliance to the Systems and Procedures including Preventive Vigilance measures put in place by Central Office for payment of Demand Drafts. Deficiencies observed should be brought to the immediate attention of branch for rectification. A.12.8.Branches, CCOs and Regional Offices are reminded that the degree of sophistication and complexities of frauds in DD related instances are alarming and the

fraudsters continue to be on prowl to encash the complacency of operational staff. The fraudsters should never be allowed to pursue and they should be jettisoned. Operational staff should respond to the requirements of the frauds prone environ and weed out the fraudsters through strict adherence to the Systems and Procedures as also the Preventive Vigilance measures put in place by Central Office. A.12.9. Paying branch - DDR.2 (a) After verifying in the manner stipulated by Central Office and satisfying himself / herself about the correctness the Paying Authority should hand-over the DD received for payment to the clerk who is authorised to handle the same. The clerk should then record the details of the DD in DDR.2 (Demand Drafts Paid Register) in the system exercising due care to enter all the details correctly especially with regard to the draft nine digit number, issuing branch code, date of issue, date of payment and amount. (b) The authorised Paying authority at the branch should check the entries in the system maintained DDR-2 and ensure that the details are recorded correctly before releasing the DD for payment. A.12.10. The DD should then be entered in the cash / transfer module in the system and passed by the officer for payment. Utmost caution should be exercised in paying the draft as no draft advice will be received. Punching in the digit cage should invariably be verified before payment. Branches may accept and record Passports/Postal Identity Cards or Identity Cards of Armed Forces personnel for the purpose of identification of payees of Demand Drafts upto Rupees Twenty five thousand only. On payment of draft, cash or transfer paid stamp with date as appropriate should marked on the face of the DD with cancellation of signatures as done for passing of cheques. A.12.11.The system generated days total of our Banks DDs paid should be made at the end of day and authenticated by the Paying authority after verification. The unused space of DDs paid column in DDR-2 for the day should be blocked for security reasons, by drawing two parallel lines. The total of DDs paid as reflected in DDR-2 should be taken to Day Book as Debit to DDR Account in General Ledger. A.12.12. Payment of drafts drawn on CCOs Core Branches located in Core CCO centres should effect payment of DDs / MTs by accessing their CCO / DDR through core network and should not debit Local DD Reimbursement Account (GL Code.2520). A.13. DDR SUMMARY A.13.1.The daily transactions in DDR account should be reported in respect of Drafts Issued in DDR-1 and Drafts Paid in DDR-2. At the close of business, the summated total of DDR-1 and DDR-2 and the total amounts of rectification passed, if any, should be incorporated in the relevant columns of the covering summary viz. DDR-3. The details of rectification should be recorded in DDR-5 and be annexed to DDR-3 summary together with DDR-1 and DDR-2. A.13.2.The closing balance of the previous working day in the covering summary should be taken as the opening balance to arrive at the closing balance of the current day. Branches should transmit their DDR summaries / data to their respective Regional Offices on the same day. It is the responsibility of the Officer-in-charge of DD Section at the branch under the guidance of Deputy Manager, to ensure that the day-end system

generated printouts of DDR are extracted, verified, authenticated and neatly filed in a separate file for verification by the Auditors / Inspectors. A.13.3. DDR Rectification If errors are noticed after the relevant summaries have been mailed, the correction of entries should be advised using the Rectification Summary. The Rectification Summary should contain all the relevant details of the draft/summary in question, with a suitable narration as to how the correction was effected. Totals of the rectification entries should be shown on the debit/credit side at the appropriate place in the DDR covering summary, and should be supported by the rectification summary. A.14. REVALIDATION OF DRAFTS A.14.1. A draft on expiry of six months from the date of issue becomes stale and requires revalidation. Drafts should be revalidated invariably at the written request of the applicant of the draft. Application for revalidation from the payee may be considered only if it is forwarded through the payees banker. The issuing branch should also ensure that the duplicate of the draft to be revalidated has not been issued by it in the meanwhile. A.14.2. The Officer-in-charge of DD section at the issuing branch should mark in red ink as "Revalidated for six months from .................. (date)"on the face of the DD and authenticate the same. The revalidation should be noted against the relative entry in DDR-1 of that date and in the relative original voucher under advice to drawee branch. A.15. REPLACEMENT DRAFTS A.15.1.Revalidation of DD should be restricted to one occasion only. After first revalidation, if the draft still remains outstanding for more than six months, the draft should be surrendered for cancellation. Branches are prohibited from revalidating DDs which are more than three years old. A.15.2.Prior approval of IBR division, Central Office is required for payment of stale DDs over three years from the date of issue. In such cases branches are required to forward their request to their Regional Office for onward transmission to IBR Division, Central Office with their recommendations. A.15.3.At the request of applicant of the draft and against surrender of original draft, branch may issue a fresh DD in the name of the same payee only, subject to recovery of applicable charges. A.16. ATTESTATION OF SIGNATURES A.16.1. Sometimes, customers while purchasing drafts in their own interest request branches to attest their signatures so as to avoid difficulties in encashment of DDs at the drawee-branches. Such request when received from well-known customers, the DD issuing branch may obtain his/her signature on the reverse side of the draft, attest such signature and return to customer cautioning against misplacement. A.16.2. In case where the drafts are drawn on Central Clearing Offices, the customer must be requested to identify the branch through which he / she would like to encash the draft for payment. After ascertaining his/her preference the draft will be marked with the words "Also payable at ................ branch" indicating the name of the branch where the draft is to be presented for payment. Branches are advised to note that the attestation under reference is not applicable for non-individual payees.

A.17. NO REFUSAL OF PAYMENT OF DRAFT A.17.1. The payment of genuine DD cannot be refused. By issuing DD, the Bank undertakes a liability which it is bound to discharge at the instance of the person on whose favour it has issued the DD. Hence by refusing payment of a DD on the grounds like payment countermanded by the drawer, drawers signature needs confirmation, draft not drawn on correct form etc., the Bank is exposed to risk of claim of damages and unnecessary legal action. If the drawee branch finds any discrepancy in DD, they should immediately contact the drawer branch over phone or through Telegram / Fax and ascertain the position. In the meantime, they could explain the difficulty to the payee or the collecting Bank orally and request them to present it a day or two later. If the payee or the collecting bank insists on written return-memo, drafts can be returned with the remark "Clarification awaited. Please present again". A.17.2. The draft issuing branches on their part should give top priority to answer queries from drawee branches pointing out the discrepancies in the draft and such clarification should be sent by Telephone/Telegram/Fax on the same day followed by despatch of confirmation copy of communication. A.17.3. If a Draft regarding which Drawee branch has received information of loss, pays the original thereafter, the responsibility for such wrong payment would lie on the paying branch. A.18. CANCELLATION OF DRAFT A.18.1. At the request of the applicant of the DD, the amount of DD may be refunded to him/her by cancellation, against his/her receipt on the back of the DD under words Received payment by cancellation. If the amount is over Rupees Five thousand, such receipt should be obtained on a revenue stamp from the applicant of the DD. The cancellation should be noted on the face of the related original DD application under full signature of officer with date of cancellation. A.18.2. Before payment is made, any endorsement on the DD must be cancelled by the endorser and any special crossing by bank concerned must have been cancelled. If a draft bears negotiation marks, stamp or crossing, branch should ask the applicant to get the consent of the payee before cancelling the same. The drawee branch should be advised of such cancellation by a letter. The exchange collected at the time of issue of a draft should not be refunded. A.18.3. Cancelled DD should be paid in cash or through credit to original applicants account subject to the amount of ceiling in force. A.18.4. The cancelled DD should be debited to the DDR account through DDR-2 of the issuing branch. A cancelled draft is to be treated as being paid by the issuing branch which should record its own code number and name as paying branch in DDR-2. Proceeds of cancelled DD of value of Rupees Fifty thousand and above should be credited to the concerned customers account and should never be paid in cash. A.18.5. When an application requesting cancellation of demand draft is received without enclosing the original draft or the replacement draft (where it has been issued already) the cancellation should be treated as if branch is issuing a new replacement draft and necessary formalities including obtention of Indemnity, clearance from drawee-branch and IBR Division , Central Office should be followed.

A.19. REPLACEMENT OF LOST DRAFT A.19.1. When a draft is reported lost and a replacement draft is asked for, issuing office should immediately notify by Letter/Telegram/Telex, the branch on which the draft is drawn and enquire whether it is paid or not. Full particulars of the draft must be furnished in the letter/Telegram/Telex.