Purchaser requests draft
Customer gives the bank the payee name, amount, currency and other required details.
Procedures · Lifecycle guide
Bank Draft Procedure
How a bank draft typically moves from purchaser funding to payee collection and final settlement.
Funding / debit
The bank normally takes the funds from the purchaser or requires payment before issuing the draft.
Bank issues instrument
The bank creates the draft/cashier-style instrument according to local product rules.
Delivery to payee
The purchaser or bank delivers the instrument to the named payee.
Payee verifies
For material amounts, the payee should independently verify the issuing bank/instrument and ask its own bank about collection/finality.
Deposit / presentation
The payee deposits or presents the draft through the relevant banking/clearing channel.
Clearing / collection
Banks exchange the item or its electronic image/data according to local clearing rules.
Finality
Once finally paid, funds settle. Before finality, provisional credit may still be reversible in some systems.
What can change from bank to bank?
The commercial objective may be similar while the bank’s internal route differs. Credit approval, collateral, compliance review, legal wording, message choice, fees and cut-off times can all vary. Always distinguish those bank-specific steps from the incorporated rules and the purpose of the SWIFT message.
Reviewed: September 2026Standards and bank policy can change.How MyGreed classifies proceduresOfficial-source directory
What kind of requirement is this?
Do not call every step “standard.”
Definitions, stop-payment rights, clearing and finality differ by jurisdiction.
Issuing and receiving banks set identification, fees, limits and collection procedures.
Counterfeit or altered drafts exist; visual appearance alone is not enough.
A bank draft is a payment instrument, not an MT700/MT760 undertaking.
Procedure check0 / 1 answered · 0 correct
Check 1
Should a payee treat a bank draft as irreversible cash immediately on deposit?