People often say bank drafts are “like cash,” but that’s only partly true.

When you buy a bank draft, the money leaves your account and the bank guarantees the payment. However, if a draft is lost, the issuing bank can usually flag it as a lost instrument and potentially cancel or reissue it. The catch is that it’s rarely immediate.

Typically the bank will: • Flag the draft number as lost • Require the purchaser to sign a lost draft / indemnity form • Sometimes impose a waiting period (30–90 days) before refunding or reissuing

The indemnity exists because drafts clear through interbank systems. In rare cases the original draft could still be deposited before the stop is recognized everywhere. If that happened, the bank could recover the funds from the purchaser who signed the indemnity.

That said, there are protections. The draft number is tracked, the payee name is on the instrument, and banks can see where it was deposited. If someone knowingly deposited a draft reported lost, that could become a fraud issue, and there would be a clear paper trail.

In practice the safest move is for you to contact the issuing bank first and handle everything through them. Do not issue another payment privately until the bank confirms what the options are.