A bank Draft, also known as a DRA, is a payment method guaranteed by the issuing bank.
Understanding Bank Drafts (DRA)
Bank drafts are often employed for significant transactions, such as a down payment on a home. Here’s a breakdown:
- Guarantee: The issuing bank guarantees payment.
- Fund Verification: The bank verifies and withdraws the funds from the payer's account.
- Reserve: The funds are then deposited into an internal or reserve account held by the bank.
Why Use a Bank Draft?
Bank drafts offer a secure payment method, particularly useful for large transactions where assurance of funds is essential. Because the bank guarantees the payment, the recipient is assured that the funds are available and will be transferred.
