What Is a Drawer in Banking Terms
Drawer, Drawee, and Payee Meaning in Bill of Exchange Simplified
Many people get confused when it comes to understand the three terms drawer, drawee, and payee. These three terms are used in Bill of Exchange. In this article, I will explain the drawer meaning, drawee meaning, and payee meaning with example. Before that, let me provide you the literary definition of drawer, drawee, and payee.
Drawer Meaning: Who is called Drawer? What is meant by Drawer in banking? What does refer to Drawer mean in banking?
The person who draws the bill is called the drawer. He gives the order to pay money to the third party.
Drawee Meaning: Who is Drawee Bank? What is Drawee Bank in Demand Draft?
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 Drawee of a Cheque in Bill of Exchange is always a Banker.
Payee Meaning: What is meant by Payee? What does Payee mean in Banking? Who is Payee of Cheque?
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.
Who is Drawer Drawee and Payee in case of Cheque? What is meant by Drawer Drawee Payee?: 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. Bank will deduct money from company's bank account and will deposit to your bank account. Here you see that your company directed bank to deduct money from its bank account and deposit to your bank account. Here, Bank is "Drawee", your company which issued cheque is "Drawer", and you, who receive money through bank, is Payee.
In other way, the person/company from whose account money is drawn is known as drawer, the bank who is facilitating withdrawal of money from person/company account is known as drawee, and the person who is paid money is known as payee.
Summary:
Company ——– Drawer
Bank ——– Drawee
You ——– Payee
Is Drawer and Payee same?
Drawer and Payee may or may not be the same person depending on the situation. In the above example, Drawer and Payee are different.
When can Drawer and Payee be the same person?
In the above example, if the Company (Drawer) orders Cheque in his own name (in favor of himself), then Company will be Drawer and Payee both because money will be debited from Company's account, and will be paid to Company itself.
Can Drawer and Drawee be the same person? Who is Drawer and Drawee? What is the difference between Drawer and Drawee?
Drawer and Drawee may or may not be the same person depending on the situation. In the above example, Drawer and Drawee are different.
When can Drawer and Drawee be the same person?
Drawer and Drawee will be the same person in Bill of exchange in which the Drawer orders to himself to pay to a Payee. In the above example, if Company is Bank, then Drawer and Drawee will be the same.
Can Drawee and Payee be the same person? What is the difference between Drawee and Payee?
Drawee and Payee may or may not be the same person depending on the situation. In the above example, Drawee and Payee are different.
When can Drawee and Payee be the same person?
Drawee and Payee will be the same person in Bill of exchange in which the Drawer issues Cheque to Drawee in favour of Drawee. In the above example, if Company issues Cheque to Bank "in favor of same Bank", then Drawee and Payee will be the same, i.e. Bank.
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About The Author
Sanjeet Kumar
I have passed my Bachelor of Engineering in Electronics and Communication Engineering, and Master of Technology in Telecommunication from National Institute of Technology Calicut. I have filed many RTI Applications, First Appeals, Second Appeals, and Complaints. I have also filed few Writ Petitions in High Court, and Supreme Court. At present, I am General Secretary at Bharat Electronics Officers Association, and General Secretary at Bharat Electronics Officers' Club.
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