What is meant by Discounting of a Bill? – InterviewSolution

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1.	What is meant by Discounting of a Bill?
Answer» While discounting a bill, the Bank buys the bill (i.e. Bill of Exchange or Promissory Note) before it is due and credits the value of the bill after a discount charge to the customer’s account. The transaction is practically an advance against the security of the bill and the discount represents the interest on the advance from the date of purchase of the bill until it is due for payment.

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