Is Bill Discounting related to any of debt instruments?



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3 Answer(s)


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Bill discounting is one of the many forms of raising cash. It is not a debt instrument.

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Mr.Venkat is right. Bill discounting is not a debt instrument. Bill discounting or letters of credit / LC is used like a DD for exporters and importers to pay each other.

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SEE BILL DISCOUNTING IS NOT A DEBT INSTRUMENT.... IT IS A FORM OF RAISING CASH,,,,
EG OF BANKS WE CAN TAKE SOME BANKS USE BILL DISCOUNTING...
BANKS TAKE THE BILL DRAWN BY THE CUSTOMER AND PAYS HIM.....IMMEDIATELY DEDUCTING SOME AMT.AS DISCOUNT OR COMMISSION....
AND AT THE MATURITY BANK PRESENTS THE BILL TO THE BORRPWER AND COLLECTS THE AMOUNT....