Section 22 of Negotiable instrument act 1881 provides that “every promissory note, bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the date on which is expressed to be payable”. Thus, in the case of Usance bills, three days…
A cheque is defined in section 6 of Negotiable Instruments acts 1881 which provides that, “A cheque is a bill of exchange, drawn on a specified banker and expressed to be payable otherwise than on demand”. The electronic image of a truncated cheque and a cheque in the electronic form (e-cheque) are also termed as ‘cheque’ after coming into…
(The similarities in usage of Hundis in India and Hawala system prevalent in the Middle East and North African countries are discussed in this post) Hundis have been in usage in India from ancient times but usages are not uniform and they are different at different places. Being a part of the informal system, Hundi…
Demand bills, Usance bills, clean bills, Documentary Bills, Accommodation bills, Hundis etc. are a different kind of bills of exchange in usage for different types of trade transactions. A cheque is also a kind of bill of exchange. However, cheque has some peculiarities from other bills of exchange. If a bill of exchange drawn or made…
Section 4 of NI Act 1881 states that “ A promissory note is an instrument in writing (not being a bank note or currency note), containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the…
Meanings of maker/drawer, drawee, payee, holder, holder in due course, endorser, endorsee, endorsement, drawee in the case of need, Acceptor for honour, who are parties to a negotiable instrument is explained below. Maker/drawer: the person who makes or executes the note promising to pay the amount stated therein. Drawee: The person directed to pay the…
A promissory note or bill of exchange or cheque payables either to the order or bearer are deemed as the instruments under negotiable instrument acts of 1881. The promissory note is actually an undertaking from the debtor to pay a certain sum of amount to the creditor or to his order. The bill of exchange…
As per RBI’s advise Indian Banks Association made certain changes in the current common loan application format for MSME loans and circulated to its member banks for adoption.The revised format for the common loan application is increased up to Rs.2 Crore. This is in view of enhancement in CGTMSE coverage up to Rs.2 crore from…
In view of enhancement in CGTMSE coverage up to Rs.2 crore from the earlier limit of Rs.1 crore, the Indian Banks Association (IBA) has formulated a common MSME loan application for adaption of all member bank of IBA. Scheduled Commercial Banks, Regional Rural Banks, and select Financial Institutions who are member institutions of CGTMSE extend…
The Section 2(16) of the Companies Act 2013 defines ‘Charge’ as “an interest or lien created on the property or assets of a company or any of its undertaking or both as security and includes mortgage”. Thus, ‘charge’ can be described as lender’s right to recover his dues by disposing-off the specified assets of the…