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Define Explain the Following Concept. Discounting of Bills - Economics

Short Note

Define explain the following concept.

Discounting of bills 

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Solution

Discounting of bills: The commercial banks provide financial assistance to the business community by discounting bills of exchange. A bill of exchange is a document that acknowledges the amount of money that is owed by the debtors as against the goods and services received by them. The banks purchase these bills produced by the customers after deducting interest on the face-value of the bill.

Concept: Commercial Banks
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APPEARS IN

Micheal Vaz Economics HSC 12th Standard Maharashtra State Board
Chapter 12 Commercial Banking
Exercise | Q 1.4 | Page 110
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