Question

Which of the following is not considered as a Bill of Exchange drawn on a banker?

• A. A cheque
• B. An electronic image of a cheque in truncation
• C. A cheque in the electronic form
• D. Bill rediscounted by another banker

Answer 1

Answer:

D. Bill rediscounted by another banker

BILL OF EXCHANGE:

A bill of exchange is often used to protect the transaction. It is a binding agreement between buyer and seller where the buyer agrees to pay a fixed sum of cash at a predetermined date or upon demand from the seller.

• A bill of exchange is a credit instrument.

• It is a written acknowledgement of a debt given by one person to another

• It is drawn by creditor upon his debtor.

• It directs the debtor to pay a certain sum of money on demand or on the of a certain period.

• According to section 5 of the Indian Negotiable instruments Act of 1881, a bill of exchange is an instrument in writing, containing an unconditional order signed by the maker, directing a certain person to pay a certain sum of money, only to or to the order of a certain person, or to the bearer of the instrument.