Bank Instruments PO DD CRD Difference and Similarities

Bank Instruments PO DD CRD are the banking instruments and they have certain uses depending upon the issuer’s needs.

The similarity between Payment Order(PO) Demand Draft(DD) and Call Deposit Receipt(CDR) is that all of them are used to pay a certain amount to thrid-party and that amount is already deducted from the issuer bank account before issuing these instruments.

Payment Order(PO)

The payment order is a bank instrument that is a directive from the issuer to the bank to pay the amount mentioned on the instrument when demanded. Payment orders are usually issued for the purpose of paying the amount to the third party within a city as they are encashed or redeemed from the bank/ branch where they were issued.

Demand Draft(DD)

Demand Draft(DD) is the banking instrument used to pay the third party and are used for inter-city payments. the payment is already deducted from the issuer bank account and hence demand draft is always paid when demanded.

Call Deposit Receipt(CDR)

Call Deposit Receipt(CDR) is a banking instrument that is usually issued to participate in some bidding and these are issued by the contractors usually and they deposit them into the Govt/ Semi Govt or private institution to get the contract.

If the issuer is successful in bidding then these CDR are taken as security deposits by that institution and if the bidder is failed then these instruments are deposited back into the account of the issuer.

Most of the banks have not shifted to more modern instruments like bankers’ cheques which have replaced both payment order and demand draft and can be encashed within a city and out of the city.

But for the call deposit receipt, they are being used even today due to their different nature and uses to participate in the bidding process.

Allied Bank application to issue these instruments can be downloaded at this link




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