Laws Relating to Bill Finance | PAPER II – PRINCIPLES & PRACTICES OF BANKING | MODULE B: FUNCTIONS OF BANKS
Laws Relating to Bill Finance Laws Relating to Bill Finance 1. Introduction Bill finance refers to financial services offered against bills of exchange. These bills represent a written unconditional order by one party to another to pay a certain sum of money on demand or at a fixed future date. 2. Class of Bills and Laws Governing Bills Bills of Exchange are governed primarily by the Negotiable Instruments Act, 1881 . Other relevant laws include the Indian Contract Act, 1872 and Sale of Goods Act, 1930 . Inland Bill : Drawn and payable within India. Foreign Bill : Drawn or payable outside India. 3. Classification of Bills Demand Bills : Payable on sight or presentation. Usance Bills : Payable after a specified period (e.g., 30 days, 60 days). Clean Bill : No documents attached; carries higher risk. Documentary Bill : Accompanied by shipping and other documents. 4. Various Types of Bill Finance ...