Who is drawee drawer and payee

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I Accept Show Purposes. Your Money. Your Practice. Popular Courses. Personal Finance Banking. What Is a Drawee? Key Takeaways A drawee is the person or other entity that pays the owner of a check or draft. The holder of the check is the payee and the check writer the drawer. Most often, if you deposit a check, your bank or check-cashing service is the drawee. Payday loan shops that offer check-cashing services act as a drawee for customers but charge a fee for the service.

When coupons are used in a retail transaction, like at a grocery store, the retail outlet becomes the drawee. Related Terms Pay to Order Definition Pay to order refers to negotiable checks or drafts paid via an endorsement that identifies a person or organization the payer authorizes to receive money.

Understanding Checks A check is a written, dated, and signed instrument that contains an unconditional order directing a bank to pay a definite sum of money to a payee. Bill of Exchange Definition A bill of exchange is a written order binding one party to pay a fixed sum of money to another party on demand or at a predetermined date. Negotiable Definition Negotiable refers to the price of a good or security that is not firmly established or whose ownership is easily transferable from one party to another.

Understanding Payments Payment is the transfer of one form of goods, services, or financial assets in exchange for another form of goods, services, or financial assets.

He gives the order to pay money to the third party. The party upon whom the bill is drawn is called the drawee. He is the person to whom the bill is addressed and who is ordered to pay.

He becomes an acceptor when he indicates his willingness to pay the bill. The party in whose favor the bill is drawn or is payable is called the payee. The parties need not all be distinct persons. Thus, the drawer may draw on himself payable to his own order. Now, let me explain these three terms with example. Suppose, you are working in a Company. At the end of month, Company pays you salary through Cheque. You go to bank to encash cheque.

Here you see that your company directed bank to deduct money from its bank account and deposit to your bank account. The drawee may be a third person, or a man may draw a bill on himself.

Drawer: It is the person who makes the bill and orders the drawee to pay a certain sum of money to the payee. The drawer generally issues the bill as part of a domestic or international commercial transaction to receive payment for value delivered.

Drawee: The drawee is the other main party involved in the bill of exchange. He is directed to A bill of exchange is a signed by the creditor and accepted by a debtor. Parties involved in a bill of exchange 1. Drawer: The person who makes a bill of exchange is called drawer. He is either a creditor or a seller and orders the borrower to pay the borrowed money. Drawee: A drawee is the one to whom the bill of exchange is made. Share this: Twitter Facebook. Like this: Like Loading