drawee
Drawee is the bank or person told to pay a cheque or draft, the one holding the money and waiting for the instruction to release it.
In plain English
Here is the strange part. The person you might assume is in charge of your cheque, the one who actually hands over the money, never chose to be involved. They were simply named.
When your uncle in Lagos writes you a cheque for ₦150,000, he is the drawer, the one giving the instruction. You are the payee, the one meant to collect. But the bank holding his account, the one that must check his balance and release the funds, is the drawee. That bank did not ask to be part of this. It is simply obeying the instruction written on a piece of paper it did not create.
Think about how odd that is for a moment. The drawee bank has no say in whether the transaction should happen. Its only job is to verify that the drawer has enough money and that the signature matches, then pay out. All the decision making happened elsewhere, yet the drawee carries all the responsibility of actually parting with the cash.
This shows up beyond cheques too. In international trade, if a Nigerian exporter in Kano sells goods to a buyer in Manchester and uses a bill of exchange, the buyer's bank in the UK becomes the drawee, the party instructed to pay once the paperwork checks out. The exporter and buyer agreed on the deal, but the bank in the middle just executes it.
For anyone sending money home from abroad using an international money order, the same pattern plays out calmly in the background. Someone somewhere is the drawee, holding funds and waiting to be told to release them, even though they never sat at the negotiating table.
Chidi writes a cheque for ₦80,000 to pay his landlord. Chidi is the drawer, the landlord is the payee, and Chidi's bank, First Bank, is the drawee that must verify funds and pay out when the cheque is presented.
Questions people ask
Is the drawee the same as the bank issuing the cheque book?
Yes, typically. The drawee is the bank where the drawer holds the account, which is usually the same bank that issued the cheque book in the first place.
Can a person be a drawee, more than a bank?
Yes. In a bill of exchange between individuals or businesses, the person or company instructed to pay is the drawee, even without a bank involved.
What happens if the drawee refuses to pay?
This is called dishonouring the cheque or draft, often due to insufficient funds or a signature mismatch, and it can affect the drawer's standing with that bank.
Last reviewed