In a financial transaction, what is often the role of the drawer?

In a financial transaction, the drawer is the individual or entity that authorizes the payment and initiates the transaction. This role is critical as the drawer provides the necessary instructions for the payment to be made from their account or to create a negotiable instrument, such as a check. The drawer ensures that there are sufficient funds available for the payment to be completed and assumes responsibility for the transaction.

In contrast, the person who receives the payment acts as the payee and simply collects the funds as directed by the drawer. The financial institution holding the funds serves as an intermediary or custodian of the funds but does not authorize the payment itself. Lastly, the debtor in a loan agreement legally owes money to a creditor, but this role does not align with the function of the drawer in a financial transaction.