Banking · Indemnity Bonds in Banking
When a bank issues a duplicate Demand Draft (DD) against an indemnity bond, what is the primary risk the bank mitigates through this contract?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The risk of default on future credit loans taken by the customer
- 2The risk of system technical failures during processing
- 3The risk of the original draft being presented and paid after issuing the duplicate✓
- 4The risk of the customer losing the duplicate draft again
Correct answer
The risk of the original draft being presented and paid after issuing the duplicate
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