The essence of the commercial effect, which brings bills of exchange

World practice shows that accounting of bills is a transfer of holders of these same promissory notes to banks until the due date for payment. After that, the payment of the stipulated bill of exchange occurs, with the exception, of course, of a certain percentage that was registered in the contract. This percentage is called, respectively, the discount rate.

Economic feasibility and ways of creating bills of exchange

Before analyzing the possible relationships that can be formed between the client, the bearer of securities, and the bank should understand the essence of the economic effect, which carries the accounting of bills in the bank. First of all, in this situation, it is worthwhile to estimate the initial stage of the formation of the bill itself. It is customary to single out two options under which the so-called commercial circulation of bills is possible. The first option is classic. In this situation, the buyer of a particular product or service issues a bill to the seller that guarantees the performance of a contractual payment in the future, or vice versa, the seller exposes a bill to the buyer of services or goods, but already a transfer. The second option - when directly by a simple bill is the payment of the goods provided by the seller. Sometimes this system is called settlement or "Domestic". Basically, the essence of both, in principle, and the second option is that the buyer has the opportunity to receive the goods without the availability of the money at the moment, and the seller is ready to receive these funds in the future.

Commercial lending through promissory notes

As can be seen, only two subjects are involved in the scheme: the seller and, accordingly, the buyer, so why is accounting of bills in the bank still necessary? In principle, discounting bills may be unnecessary if these bills are used in the future as a means of settlement or used in certain chains of mutual settlements, when they are not exchanged back for a monetary equivalent. On the other hand, the bill is solely evidence to some extent of the buyer's reliability in the field of payment, which, as is known, can not always be true for objective or subjective reasons. At the same time, development of the bill system itself as a kind of credit facilitates in its essence the burden on the banking sector, since it eliminates the need to apply to the bank for a loan, in fact, the seller becomes the lender. When registering or rediscounting bills, the bank receives a certain percentage as a bonus. One of the few, but significant, drawbacks of such a system for banks is the presence of a fixed interest in concluding a transaction for accounting or re-calculation of bills, which is not very comfortable given the possible change in the market's conjecture.

Possible risks

Naturally, as in other areas of credit relations, accounting of bills carries a certain amount of risks. First of all, we are talking about the possibility of non-payment of credit obligations, which to some extent can be leveled by regressive requirements for endorsers (the latter is greater, the risk, of course, becomes less). The risk of concentration is not excluded. The next is the so-called security risk. The fact is that the accounting of bills is not accompanied, as a rule, by any means of ensuring current performance for obligations, which, naturally, significantly increases the risks in comparison with other methods of lending. Well, in conclusion, there is a certain, it can be said, specific risk for commercial promissory note lending is the possibility of accounting for securities that do not have bill of exchange or other force, or, in general, counterfeit ones.