Inland bill discounting ensures timely payments to the borrower from the bank.
- The bank buys the bill of exchange drawn by the borrower before the due date and credits the value immediately, after deducting the agreed amount as discount / commission.
- The bill is then presented to the borrower's customer on the due date of the bill and the customer collects the total amount due.
- If the bill is delayed, the borrower or his customer pays the Bank a pre-determined interest depending upon the terms of transaction agreed upon with the Bank.
*The Bills drawn are in strict conformity with the terms of the letter of credit. Bills of exchange should have arisen out of a bonafide commercial or trade transaction.