What is the drawee on a cheque?

The drawee on a cheque is the bank that is instructed to pay the cheque amount to the payee. When someone writes a cheque, they are authorizing their bank to release funds from their account to the person or entity that is named on the cheque, known as the payee. This payment process highlights the role of the bank in ensuring that the funds are valid and available when the payee presents the cheque for payment.

Understanding the roles within a cheque transaction is important; the issuer is the person writing the cheque, the payee is the person receiving it, and the drawee, which is the bank, processes the transaction. This framework is crucial for managing financial transactions effectively and ensuring clarity in the roles of each party involved.