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Bill Financing

Bill Financing

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Published by us_prakash
Laws on Bill Financing
Laws on Bill Financing

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Categories:Types, Business/Law
Published by: us_prakash on Aug 29, 2010
Copyright:Attribution Non-commercial


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Laws relating to Bill Financing
Bill financing involves discounting or purchasingof commercial bills arising out of sales. It ismore advantageous than a CC / OD, as theunderlying transaction is known. The date of repayment is known. Its transferable and canbe rediscounted to improve the banksliquidity.
Bill of Exchange
Section 5 of the NI act defines a bill of exchange as  an instrument inwriting containing an unconditional order signed by its maker / drawerdirecting the drawee to pay a sum of money to the payee or his order orthe bearer of the instrument.
The maker of the bill is the drawer / creditor / seller.
The person who is liable to make the payment is the drawee / debtor /buyer
The person who entitled to receive the payment is the payee.
When the bill is assigned to a 3
party, the assignee becomes the creditorand the drawer becomes liable to the assignee if the drawee defaults inpayment.

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