bill of exchange

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Related to bills of exchange: promissory note

Bill of exchange

General term for a document demanding payment.

Bill of Exchange

A document requiring payment by one party to another for a good or service the party demanding payment provided. See also: Receipt.

bill of exchange

a FINANCIAL SECURITY which is used to extend business CREDIT for a limited time period. The lender draws up a bill of exchange for a specified sum of money payable at a given future date, usually three months hence, and the borrower signifies his agreement to pay the amount involved by signing (i.e. accepting) the bill. In addition, a borrower will often arrange for a bill to be guaranteed by an ACCEPTING HOUSE, which in return for a fee will agree to repay the debt should the borrower be unable to do so. Most bills are in fact ‘discounted’ (i.e. bought from the drawer) by a DISCOUNT HOUSE for an amount less than the face value of the bill (the difference between the two sums being the interest charged). The bill may then be held until maturity or sold at a lower price (‘rediscounted’) to another discount house, or, more commonly, on-sold to the COMMERCIAL BANKS. See DISCOUNT, DISCOUNT MARKET, REDISCOUNTING, INTEREST RATE.

bill of exchange

a FINANCIAL SECURITY representing an amount of CREDIT extended by one business to another for a short period of time (usually three months). The lender draws up a bill of exchange for a specified sum of money payable at a given future date, and the borrower signifies his agreement to pay the amount indicated by signing (accepting) the bill. Most bills are

‘discounted’ (i.e. bought from the drawer) by the DISCOUNT MARKET for an amount less than the face value of the bill (the difference between the two constitutes the interest charged). Bills are frequently purchased by the COMMERCIAL BANKS to be held as part of their RESERVE ASSET RATIO. See DISCOUNT, ACCEPTING HOUSE, DISCOUNT HOUSE.

References in periodicals archive ?
As one account puts it: "He carried the art of kiting checks and bills of exchange to a high degree of perfection.
He borrowed some 36 million livres from him against bills of exchange. At the same time he handed over to Castan and to other creditors additional securities for their loans in the shape of 28 million livres' worth of Mint bills, which would be returned to him when he liquidated the bills of exchange.
This naturally led to a steady decline in discounting of bills of exchange from other towns.
This is how deals are closed, by compensating some debts with others and through the signature of bills of exchange issued to different places.
While bills of exchange are not completely without flaws, they are effective and can help a business avoid many of the pitfalls commonly associated with overseas trading.
In fact, life insurance joined stock shares, bonds, mortgages, bills of exchange, and promissory notes as inevitable props for England's dynamic economy.
This master file then automatically generates key documents such as commercial invoices, packing lists, bills of exchange, and beneficiary certificates in minutes.
Because Venice was also an important bullion market with regular trading cycles, it became an ideal center for bills of exchange and rechange.
Could paper money (bills of exchange, etc.) substitute for precious metals, and, if it did, what advantages might there be gained from it?
He shows that the common law courts did indeed deal regularly with commercial cases, both bills of exchange and inland bills.
The airwaves were full of advertisements for firms offering to redeem their own shares, bonds, and bills of exchange, or inviting people to invest money at unheard-of rates of interest.
Although signed bills of exchange are a good method of payment for transactions within a given country, a bill of exchange used to pay foreign vendors is another matter.