You have obtained a Demand Draft from a Bank, payable to certain person or Bank.
Unfortunately your Demand Draft is lost.
You tell you Bank that draft is lost and you ask your money back which you had paid to get money.
Bank may require you to give two things.
1) A letter from the payee bank that draft is not encashed by it.
2) They may ask an affidavit from you.
In affidavit, bank will ask you to state that 1) My Draft is lost 2) In case Bank suffers any damage in future because of this draft, I will compensate -indemnify Bank.
So the Bank wants affidavit for future protection against lost draft…
It is okay.