The correct answer is: B. should not be paid in cash.
A demand draft is a negotiable instrument that is payable on demand. It is a type of cheque that is drawn on a bank and payable to a specified person or order. Demand drafts are often used to make large payments, such as for the purchase of a car
or property.The Reserve Bank of India (RBI) has imposed restrictions on the payment of demand drafts in cash. According to the RBI’s guidelines, demand drafts for amounts of Rs. 20,000 and above cannot be paid in cash. This is to prevent the use of cash for illegal activities, such as money laundering and terrorist financing.
If you need to pay a demand draft for an amount of Rs. 20,000 or above, you can do so by cheque, bank transfer, or online transfer. You can also pay the demand draft in cash at a bank branch, but the bank will be required to report the transaction to the RBI.
Here is a brief explanation of each option:
- Option A: Demand drafts for Rs. 20,000 and above can be paid in cash. This is incorrect, as per the RBI’s guidelines, demand drafts for amounts of Rs. 20,000 and above cannot be paid in cash.
- Option B: Demand drafts for Rs. 20,000 and above should not be paid in cash. This is correct, as per the RBI’s guidelines, demand drafts for amounts of Rs. 20,000 and above cannot be paid in cash.
- Option C: Mode of payment will depend on the status of the customer. This is incorrect, as the mode of payment for a demand draft is not dependent on the status of the customer. All customers, regardless of their status, must follow the RBI’s guidelines on the payment of demand drafts.
- Option D: None of the above. This is incorrect, as option B is the correct answer.