Meaning of Bill of Exchange
What is Bill of exchange:
The bill of exchange is a document or title of credit by which the drawer or drawer requires the drawee or drawee to make the payment of a specified amount within a specific period to the policyholder or holder, or whoever he or she designates for that purpose.
The bill of exchange can be used as a guarantee of payment of the credits granted. In case of non-compliance with the payment, the beneficiary has the right to protest in court to demand payment of the debt.
Likewise, the bill of exchange can be used as a means of payment to streamline commercial purchase-sale transactions.
Bills of exchange emerged in the Middle Ages due to the need for monetary trade and as a form of accumulation and safeguarding of capital against feudal income.
Those who first issued bills of exchange were the Italian bankers, who, around the 12th century, began to use them in their transactions.