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This is a technical question and according to my opinion tenor is involved in the usance bill so we use the term of discounting whereas in sight bill no tenor is involved and we have to pay on sight or at one as per UCP 600 so we purchase the bill instead of discounting as it is payable on first demand.
Saifullah Arif
Soneri Bank Limited
Dear, According to me, Demand Bill is payable on demand, supported by doccuments to title, so it is purchased at full value by bank, while discouting means at less than value and it is just like clean finance, because usance is other than demand, a period and uncertainity is involved, usually there are no document to title to goods, so bank keep high margin and pay less than face value.So we use Purchase of Bill in term of Demand Bill and Discouting of Bill in term of Usance Bill.
Sheikh Junaid,
Allied Bank Limited.
According to me, In case of the bill purchase, the bill is purchased and that in case of bill discounting the bank is only financing against the said bill. The title of the bill would be transferred in favour of the bank in case of Bill purchase and whereas the title of the bill remains with the party in case of Bill Discounting. Further the responsibility of recovery of the amounts under the Bill purcahse would absolutely on the bank in case of Bill Purchase and the responsibility of recovery of the money under the bill discounting would be on the party.
M.V Rao, Advocate, Hyderabad
What else can I help you with?
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fund based facilities includes cash credites, bill discounting, overdraft and term loan
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demand bill
What is the difference between bill of lading and bill of entry?
No difference
How do you calculate the yield on a 3-month treasury bill?
To calculate the yield on a 3-month treasury bill, you divide the difference between the face value and the purchase price by the purchase price, and then multiply by 100 to get the percentage yield.
What is the difference between debit and credit?
Debit - purchase deducted from your bank account Credit - gets put on a bill, and you pay it later
What is the difference between factoring and bill discounting?
Whereas invoice discounting is a loan secured against your outstanding invoices, invoice factoring companies actually purchase the unpaid invoices outright. ... This is an important difference because it provides factoring companies with credit control, which enables them to deal with customers directly.
Difference between funded and non-funded credit facilities?
fund based facilities includes cash credites, bill discounting, overdraft and term loan
Bill discounting is done by banks in case of only?
demand bill
What is the difference between bill and invoice?
What is the difference between Invoice & Bill, in common terms. What is the difference between Invoice & Bill, in common terms.
What is the difference between bill of lading and bill of entry?
No difference
Difference between purchase order and proforma invoice?
Purchase order raise by purchase party but Profarma invoice raise by saler party on behalf of purchase order as a sample bill. Pramod kumar 9911582862
How do you calculate the yield on a 3-month treasury bill?
To calculate the yield on a 3-month treasury bill, you divide the difference between the face value and the purchase price by the purchase price, and then multiply by 100 to get the percentage yield.
What is the difference between debit and credit?
Debit - purchase deducted from your bank account Credit - gets put on a bill, and you pay it later
Difference between bill of exchange and promissory note?
difference between bill of exchange and promissory note?
What is difference between bill and voucher?
what is different between bill and voucher
How do you calculate the yield of a Treasury bill?
To calculate the yield of a Treasury bill, you can use the formula: Yield (Face Value - Purchase Price) / Purchase Price (365 / Days to Maturity). This formula takes into account the difference between the face value and purchase price of the bill, the number of days to maturity, and the number of days in a year.
What is Discounting bill of exchange?
It means when holder of a bill needs money he can take the bill to bank where the bank will discount it and chargesome interest on that
