Regular used words in banking world
Promissory Note is an instrument in writing (not being a banknote or a currency note), containing an unconditional undertaking, signed by the maker, to pay on demand or at a fixed or determinable future time a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument.
Bill of exchange
A bill of exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay on demand or at a fixed or determinable future time a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument.
A cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.
The maker of a bill of exchange or cheque is called the “Drawer”, the person thereby directed to pay is called the “Drawee”.
“Drawee in case of need”
When in the bill or in any endorsement thereon the name of any person is given in additional to the drawee to be resorted to in case of need, such person is called “Drawee in case of need”.
After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the “Acceptor”.
Acceptor for honor
When a bill of exchange has been noted or protested for non acceptance or for better security, and any person accepts it supra protest for honor of the drawer or of any one of the indrosers, such person is called an “Acceptor for honor”.
The person named in the instrument, to whom or to whose order the money is by the instrument directed to be paid, is called the “payee”.
The holder of a Promissory Note, Bill of exchange or Cheque means the payee or indorsee who is in possession of it or the bearer thereof but does not include a beneficial owner calming through a be namidar. “Holder”
“Holder in due course”
“Holder in due course” means any person who for consideration becomes the possessor of a promissory note, bill of exchange or cheque of payable to order, before it became over due, without notice that the title of the person from whom he derived his own title was defective. “Holder in due course”
“Payment in due course”
“Payment in due course” means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned.
A promissory note, bill of exchange or cheque drawn or made in Bangladesh, and made payable in, or drawn upon any person resident in, Bangladesh shall be deemed to be an inland instrument.
Any such instrument not so drawn, made or made payable shall be deemed to be a foreign instrument.
A Negotiable Instrument means a Promissory Note, bill of exchange or cheque payable either to order or to a bearer.
When a Promissory Note, bill of exchange or cheque is transferred to any person, so as to constitute that person the holder thereof, the instrument is said to be negotiated.
When the maker or holder of a negotiable instrument signs the same, otherwise than as such maker, for the purpose of negotiation, on the back or face thereof or so signs the same purpose a stamped paper intended to be completed as a negotiable instrument, he is said to indorse the same, and is called the indorser.
Indorsement “in blank” and “in full”
If the indorser signs his name only, the indorsement is said to be “in blank” and if he adds a direction to pay the amount mentioned in the instrument to or to the order of, a specified person, the indorsement is said to be “in full” and the person so specified is called the “indorsee” of the instrument.
Where an instrument may be constructed either as a promissiory note or bill of exchange, the holder may at his election treat it as either, and the instrument shall be thenceforward treated accordingly.
Where amount is stated differently in figures and words
If the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount stated in words shall be the amount undertaken or ordered to be paid: Provided that if the words are ambiguous or uncertain, the amount may be ascertained by referring to the figures.
Instrument payable on demand
A promissory note or bill of exchange is payable on demand,-
- Whether it is expressed to be so, or to be payable at site or on presentment; or
- Where no time for payment is specified in it, or
- Where the note or bill accepted or indorsed after it is overdue, as regards the person accepting or indor-sing it.
Inchoate stamped instruments
Where one person signs and delivers to another a paper stamped in accordance with the law rating to stamp duty chargeable on negotiable instruments, either wholly blank or having written thereon an incomplete negotiable instrument, in order that it may be made, or completed into a negotiable instrument he thereby gives primafacie authority to the person who receives that paper to make or to complete it, as the case may be, into a negotiable instrument for the amount, if any, specified therein, or, where no amount is specified for any amount, not exceeding, in either case, the amount covered by the stamp.
“At sight” “On presentment” “After sight”
The expression” after sight” means, in a promissory note, after presentment for sight, and, in a bill of exchange, after acceptance, or noting for non-acceptance, or protest for non-acceptance.
When note or bill payable on demand is overdue.
A promissory note or bill of exchange payable on demand shall be deemed to be overdue when it appears on the face of it to have been in circulation for an unreasonable length of time.
A note or bill Payable at a determinable future time
A promissory note or bill of exchange is payable at a determinable future time within the meaning of this act if it is expressed to be Payable.
(a) at a fixed time after date or sight; or
(b) on or at a fixed time after the occurrence of a specified event which is certain to happen, though the time of its happening may be uncertain.
Anti-dating and post dating- A Promissory note, bill of exchange or cheque is not invalied by reason only that it is post-dated:
Provided that anti-dating or post dating does not involve any illegal or fraudulent purpose or transaction.
“Maturity” Days of grace
The maturity of a promissory note or bill of exchange is the date at which it falls due.