Legal Definitions - drawee bank

A drawee bank is a financial institution that is asked to pay the amount of a negotiable instrument, such as a check or a draft. When the bank accepts, it becomes obliged to pay that amount. The drawee bank is also known as a payor bank.

For example, if you write a check to your friend, your friend's bank becomes the drawee bank. When your friend deposits the check, their bank becomes obliged to pay the amount written on the check to your friend.

Another example is when a company issues a draft to pay for goods or services. The bank that the company uses becomes the drawee bank. When the draft is presented for payment, the bank becomes obliged to pay the amount written on the draft.