Definition of Commercial Bill's

 Commercials Bill or the Bill's of exchange, popularly known as bill is a written instrument containing an unconditional order. The bill is signed by the drawer, directing a certain person to pay a certain sum of money only to, or order of a certain person, or to the bearer of the instrument at a fixed time in future or on demand. Once the buyer signifies his acceptance on the bill itself it becomes a legal document. Bill of exchange is a very important document in commercial transactions. When the buyer is unable to make the payment immediately, the seller may draw a bill upon him payable after a certain period. The buyer accepts the bill and returns to the seller. The seller may either retain the bill till the due date or get it discounted from some banker and get immediate cash. Usually such bills are discounted or rediscounted by commercial banks to lend credit to the bill-hilders or to borrow from the central bank.
      Indian bill market is an underdeveloped one. A well organised bill market or discount market for short term bill is essential for establishing an effective link between credit agencies and Resreve Bank of India. The reasons for the poor development Of bill market in India are historical and include :
       (i) Preference for cash to bills;
       (ii) Lack of uniform practices with regard to bills;
       (iii) Excessive stamp duty;
       (iv) Preference for cash credit and overdraft arrangements as a means of borrowing from commercial banks; and
       (v) Lack of specialised discount houses.
       Reserve Bank of India started making efforts in this direction in 1952. However, a new and proper bill market was introduced in 1970. There has been substantial improvement since then.

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