In this banking sector, today we going to learn types of bill of exchange. The exchange bill is called a type of certification. In other words, the exchange bill refers to a written document containing an unsupported and unconditional order by the assessee, which specifies the amount of money being given to a person or another specified person at specific times.
According to Section 5 of the transferable documents of 1881, “If a person gives a specific order to give a specific amount of money to a certain person in a written document signed by the producer, then the document is called the exchange bill.”
Types of Bill of Exchange
The transfer bill among the transferable documents is one of the best documents. It can be divided into several ways. The way is shown in the below. There are two types of exchange bills. One is the geographical location and the other is the types of bill of exchange in a period of time. So let’s go ahead to know more.
Inland Bill of Geographical location
Bill based on geographical location, the bill is divided into the following categories. The exchange bill is prepared and paid in the same country as the local bill. Example: As a resident of California Mr. Root make a bill of exchange to the Jonson who live in the New York City. And he accepted the bill. After all, it is regarded as a domestic or internal bill. And it called the Inland Bill of Geographical location.
Foreign Bill of Geographical location
If a bill that is made in one country is payable in another country, then it is called a foreign bill. If Smith prepares a bill, it will be treated as a foreign bill if it is paid to the American public. The foreign bill has been divided into two parts. Once is a documentary bill and another clean bill.
Documentary Bill of Foreign Bill
If there is a necessary national document with the foreign bill, then it is called a documentary bill. Such a bill is handed over to the implementer like the recognition. It is called D/A or documents against acceptance. Such a bill was handed over. It is called D/P or Document against Payment.
Clean Bill of Foreign Bill
There is no attachment to this foreign exchange bill. These bills have been prepared in the context of personal trust and close contact with importers and exporters.
Others Types of bill of exchange
Demand Bill: If the payment is made in the presentation, then it is called the bill. There is no specific time to pay the money in this bill.
Time Bill: The bill to which the date of payment is mentioned is called a time bill. When the date of payment is made during the preparation of such a bill, it is considered to be payable on that date. Just as a bill is executed, it is said that after 60 days, the person will have to pay the same.
Accommodation Bill: For the purpose of providing financial benefits to a ready bill, one considers the bill approved by another as a sub-bill. It has been defined in Section 3 of this Act.
Short Bill: The bill that is deposited with the bank for the sake of collection is called a short bill. It does not get discounted. The bank of America Hialeah creating the short bill for their privileges.
Domiciled Bill: The bills that are not in the residence of the accredited taxpayer, on condition of payment of the sum, are the bills of acceptance bills. The sender may write the name of the preacher’s name.
However, we came in the last point. It was the Types of Bill of exchange. The exchange bill is used for the settlement of internal and external trade. Besides, provision of temporary financing can also be made through exchange bill. Keep in mind that if you don’t understand by reading once, you have to read 2 or 3 times. And I hope, the types of bill of exchange would be clear to you.