A draft for ₹ 1,30,000 was purchased by a Govt. department in favour of a contractor. The same was sent by post. The draft is lost probably while in transit. The Govt. Dept. requests for issuance of duplicate draft and i

When the draft is lost in transit it amounts to constructive delivery to the payee and therefore the bank can ask the payee to execute an indemnity and with the concurrence of the Govt dept (in writing) it can issue a duplicate draft. Non-payment (stop payment) of the draft has to be ensured by verifying in the system. The Branch should also get the higher authority's permission for issue of the duplicate draft. Proposed Action Plan Receive written request from the Government department detailing the loss. Ask for an indemnity letter, emphasizing it's essential for safeguarding public funds. Optionally request an FIR copy or written confirmation of loss in transit. Cancel the original draft in the system to stop any unauthorized encashment. Issue the duplicate draft within 15 days, as mandated, and levy any nominal administrative charges per bank policy. If delayed, credit interest. If department still refuses indemnity, escalate: recommend they secure funds in a public-sector indemnity format, or ask RBI branch for guidance. Document all the steps-communications, reminders, and the indemnity request to ensure audit compliance and transparency.