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Explain the role of a discounter in bank accepted bill facility. What is the liability, if...

  1. Explain the role of a discounter in bank accepted bill facility. What is the liability, if any, of a discounter?
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Answer #2

Discounting of bill of exchange-

When a person does credit sales to the other person, then the seller draws a bill of exchange on buyer for a fixed period. In this case, the seller can recover the amount due only at maturity date.

If the seller needs money before the due date, then he can apply for dicounting of bill facility in his bank. The bank will reimburse the amount due after charging some discount to the seller and take the possession of bill with itself.

On the due date, the buyer is required to pay amount to the bank. If the buyer does not p[ay the amount due to the bank then the bank can withdraw the amunt from the bank account of the seller.

answered by: anonymous
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