Page 162 - DMGT303_BANKING_AND_INSURANCE

Unit 8: Negotiable Instruments

8.3 Features of Negotiable Instruments Notes

Basis of Promissory Bill of Cheques Hundis
Features Notes Exchange
Meaning This is an This is an It is an order by It is an
instrument instrument the account instrument
containing containing holder of the used for the
unconditional unconditional bank directing purpose of
order to pay a order to pay a his banker to transfer of
certain sum of certain sum of pay on money without
money to a money to a demand, the its actual
certain person. certain person. specified physical
amount, to or movement
to the order of
the person
named therein
or to the bearer.
Parties involved Maker and the Drawer and Drawee Bank Holder or
Payee drawee and Account purchaser,
holder drawer or
indigenous
banker, drawee
and payee
Certainty of Certain Certain Certain Certain
parties
Order unconditional unconditional unconditional unconditional
order order order order
Certainty to pay The time of The time of The time of The time of
payment must payment must payment must payment must
be certain be certain be certain be certain in
hundis.
Physical form A promissory A bill must be A cheque must There is no
note must be in in writing, duly be in writing actual physical
writing, duly signed by its and duly movement of
signed by its drawer, signed by the hundis
maker accepted by its drawer
drawee
Transferability Easily Easily Easily Easily
Transferable Transferable Transferable Transferable

Task Visit your nearby bank and try to see the negotiable instruments.
Self Assessment

Fill in the blanks with suitable word(s)
1. The person to whom the amount mentioned in the promissory note is payable is known
as ..............................

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