What is DPT Full Form in Banking?

The DPT full form in Banking is a Demand and Promissory Note. It is a legal document in which one of the parties’ promises in writing to pay a determinate sum of money to the payee at a fixed time or under the demand of the payee, under certain terms. Banks or lenders issue demand promissory notes. A demand promissory note differs from a regular promissory note in that the borrower has no set repayment schedule. Instead, the borrower does not repay the debt or loan until the lender demands it.

How does DPT work?

Promissory notes can be somewhere between an IOU’s informality and a loan contract’s rigor. A promissory note includes a promise to pay on demand or at a defined future date, as well as procedures required for payback.

Uses of DPT in Banking:

They are commonly used in a number of financial and commercial transactions, and they offer quick access to funds through flexible repayment terms. It helps businesses to manage their operational expenses and their cash flow. They also facilitate loans between individuals without the need for a formal credit check.