Wrong Name on Demand Draft? Cancel, Reissue or Correct
Demand draft made in the wrong beneficiary name? Why banks rarely correct it, how cancellation and reissue work, charges, timelines and what to ask, as of 2026.
In this article (9 sections)
"I bought a demand draft for my child's college fee, and the institution's name on it is wrong." Or the beneficiary name has a spelling error, or you wrote the wrong payee in the application. The quickest fix is usually to cancel the draft at the issuing branch with the original instrument and buy a new one in the correct name, because banks generally do not alter the payee name on an issued draft. If the mistake was the bank's, ask in writing for the charges to be waived.
This guide covers the options to ask about, the documents you need, the charges, and what to do if the draft has already been handed over or lost. It is general information as of October 2026; procedures and charges vary by bank.
Why a DD name usually cannot be corrected
A demand draft is a payment instrument drawn by the bank on itself. The issuing bank has already debited your account and committed to pay a named payee. Altering the name later would weaken the instrument and invite fraud, so banks treat the payee name, amount and payable-at location as fixed.
Since 15 September 2018, RBI has also required banks to print the purchaser's name on the face of demand drafts, pay orders and banker's cheques, to reduce anonymity. And under RBI's KYC directions, drafts of ₹50,000 and above must be issued by debit to your account or against a cheque, not against cash. Both rules help you here: the bank can trace that you bought the draft and refund you to your account.
Your options
| Situation | Option to ask about | What you need |
|---|---|---|
| Draft still with you, name wrong | Cancel and reissue in the correct name | Original draft, request letter, ID; new application |
| Minor spelling error, payee willing to try | Payee's bank may accept with a declaration (not guaranteed) | Payee's proof of identity, letter |
| Bank wrote the wrong name though your form was correct | Cancel and reissue with charges waived | Copy of your application form showing the correct name |
| Draft handed over and lost by payee | Duplicate draft request (only if name was right) or cancellation | Indemnity, non-payment confirmation |
| Draft older than three months | Revalidation or cancellation | Original draft |
Cancel and reissue: the usual route
- Get the original draft back if you gave it to the payee. Cancellation almost always requires the physical instrument.
- Write a cancellation request at the issuing branch (template below). The request should come from the purchaser; if the draft was bought by debit to a joint account, follow the bank's signing rules.
- Sign on the back if asked. Some banks ask for the purchaser's signature on the reverse, or on a revenue stamp, to confirm the cancellation.
- Get an acknowledgement with date, stamp and a reference number.
- Check the refund. It is usually credited to your account after the bank deducts its cancellation charge; drafts bought for cash may be refunded as per the bank's rules for the amount.
- Apply for the new draft with the payee's exact name, as it appears on their bank account or the institution's fee notice. Ask the payee to confirm the exact spelling and any "payable at" city before you apply.
If the payee wants to try depositing it anyway
A collecting bank may accept a draft with a very small spelling variation if it is satisfied the account holder is the payee, sometimes against a declaration. This is entirely at the collecting bank's discretion. If it is returned, you are back to cancellation, with lost days, so for fee deadlines cancel and reissue straight away.
If the bank made the mistake
Keep a copy of the DD application form that shows the correct name. Ask the branch to:
- Cancel and reissue the draft the same day if possible.
- Waive both the cancellation charge and the new issue commission.
- Give you a letter for the payee (such as a college) explaining the delay, if a deadline is involved.
A wrong charge can be disputed like any other; see hidden bank charges refund.
Worked example: what a cancellation and reissue may cost
You bought a ₹45,000 draft that has the wrong institute name. Your bank's schedule (illustrative figures, check yours) shows a cancellation charge of ₹150 plus 18% GST.
| Item | Amount |
|---|---|
| Draft amount | ₹45,000 |
| Cancellation charge | ₹150 |
| GST on charge (18%) | ₹27 |
| Total deducted | ₹177 |
| Refund to your account | ₹45,000 − ₹177 = ₹44,823 |
You then pay the issue commission on the new draft as per the schedule. If the error was the bank's, ask for the ₹177 and the new commission to be waived or refunded.
Lost draft or expired draft
- Lost draft (correct name): RBI's instructions ask banks to issue a duplicate draft within a fortnight of a request from the purchaser or the beneficiary, and to pay interest at the fixed deposit rate for the corresponding period for any delay beyond that. Banks usually ask for an indemnity and confirm the original was not paid. This does not cover third-party endorsements.
- Expired draft: A draft is valid for three months from its date. After that, the issuing bank can revalidate it or cancel and refund it. A draft with the wrong name should be cancelled rather than revalidated.
If someone wrongly encashed your draft, treat it as a fraud: complain to the bank in writing immediately, and report at cybercrime.gov.in or 1930 if it involves online deception.
Where to complain
| Problem | Where to go |
|---|---|
| Branch refuses to cancel without a clear reason | Branch manager, then the bank's grievance redressal officer |
| Bank's error, charges not waived | Grievance officer, with a copy of your application |
| Duplicate draft delayed beyond a fortnight | Grievance officer; ask for interest for the delay |
| No reply in 30 days or unsatisfactory reply | RBI Ombudsman at cms.rbi.org.in (helpline 14448) |
The full escalation steps are in bank not resolving complaint.
Ready-to-copy cancellation request
To,
The Branch Manager,
[Bank name], [Branch]
Subject: Cancellation of demand draft no. [number] and reissue
I purchased demand draft no. [number] dated [date] for ₹[amount],
payable at [city], by debit to my account no. [number]. The payee name
on the draft is "[name printed]", but it should be "[correct name]".
I return the original draft and request you to cancel it and credit the
amount to my account. I also request a fresh draft for ₹[amount] in
favour of "[correct name]" payable at [city].
[If bank's error: My application form, copy enclosed, shows the correct
name. I request you to waive the cancellation and issue charges.]
Kindly acknowledge this request.
[Name], [Signature], [Mobile], [Date]
What not to do
- Do not alter the name on the draft yourself. Overwriting or correction fluid makes the instrument invalid and may look like tampering.
- Do not hand the original to anyone claiming they can "get it corrected".
- Do not share OTPs, PINs or net banking passwords with callers offering DD help. Use the bank's official number from your passbook or website, not a number found in search ads.
- Do not wait until the fee deadline. Cancellation and reissue can take a day or more at some branches.
Key takeaways
- Banks generally do not correct the payee name on an issued demand draft; cancel and reissue is the standard route.
- Cancellation needs the original draft and a request from the purchaser; the refund comes minus the bank's charge plus GST.
- If the bank made the mistake, show your application form and ask for charges to be waived.
- Lost drafts: banks should issue a duplicate within a fortnight, with interest for delay beyond that.
- Drafts are valid for three months; escalate unresolved issues to cms.rbi.org.in after 30 days.
Frequently asked questions
Can a bank correct the payee name on a demand draft?
Generally no. Once issued, the payee name, amount and payable-at place on a demand draft are treated as fixed, and banks do not alter them on the instrument. The usual route is to cancel the draft and buy a fresh one in the correct name.
How do I cancel a demand draft?
The purchaser submits the original draft with a cancellation request at the issuing branch, along with ID proof and, if asked, a revenue stamp or signature on the back. The bank credits the amount, minus its cancellation charge, to the purchaser's account or pays it as per its rules.
What are the charges for cancelling a demand draft?
Cancellation charges are set by each bank in its schedule of charges, plus GST. If the wrong name was the bank's own error, ask in writing for the cancellation and reissue charges to be waived.
Can the payee deposit a DD with a small spelling mistake in the name?
It depends on the collecting bank. Some may accept a minor spelling variation if the account holder is clearly the same person, sometimes with a declaration, but they are not obliged to. A draft in a different person's name will be returned.
How long is a demand draft valid?
A demand draft, like a cheque, is valid for three months from its date of issue. After that it must be revalidated by the issuing bank or cancelled and the money refunded.
This article is for general education and is not personalised financial, tax or legal advice. Rates and rules are as of 27 Oct 2026; confirm current terms with your lender, AMC or a qualified adviser.
