Bill of Exchange

In an international trade, bill of exchange is a negotiable instrument made by seller/exporter addressed to the buyer/importer. Once after shipping goods, the required documents for import along with bill of exchange are submitted with exporter’s bank to send to foreign buyer through buyer’s bank. The said bill of exchange draws in duplicate as per specified format.

Bill of exchange contains the reference details of shipment, amount of invoice to be receivable from overseas buyer, the time of payment to be effected, bank details etc. The bill of exchange is drawn on the letter head of exporter and signs under and sends to buyer through his bank. Once after reaching documents to overseas buyer, he accepts bill of exchange by signing on bill of exchange. On maturity date of bill of exchange, the buyer effects amount of proceeds to the supplier of goods through his bank.