Who is the drawee in a financial transaction?

In a financial transaction, the drawee is indeed the entity that is ordered to pay the money. Typically, this is a bank or financial institution that holds the account from which funds are to be withdrawn. When a check is written, for example, the drawee is the bank specified on the check, instructed to pay the specified amount to the payee (the person receiving the funds).

Understanding this role is crucial in financial management, as it establishes who is responsible for transferring funds in various transaction types, including checks, drafts, and other payment instruments. Knowing the definition and function of the drawee helps clarify various processes in personal financial management, including how payments are initiated and completed.