Answer Posted / venkatanarayana

hi frds i want to give some more additional information to
the answer 1 given by sridhar.

Mr sridhar explained abt BOE. But why we need to go for
bills of exchange?

Generally we will go for bills of exchange for getting loan
from bank. it is also one form of getting loan from the
bank. we will keep bills with the bank and we will get loan
from the bank. the loan value(varies from 80-95% of bills
amount) depends on various things like maturity date, risk,
interest etc. Bank will recover the amt against the customer
payments.

Bank will charge some thing for bills of exchange, so banks
get benefit from it and company will get liquidity so
company can able to do more turnover.


thanking you
venkat
+91-9871905974
venkatanarayana.k@rediffmail.com

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