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Promissory Note

Bill of exchange

Negotiable Instruments - 2

Lecture # 24

State Bank of Pakistan

According to Article 35.- (1)of the State Bank of Pakistan Act, the Federal Government shall draw, accept, make or issue any Bill of Exchange, Promissory Note

State Bank of Pakistan

Any person contravening the provision of this Section shall be punishable upon conviction with fine which may extend to double the amount of the Bill, Promissory Note, whereof the offence is committed.

Bank

A financial institution licensed as a receiver of deposits.

There are two types of banks: Commercial/retail banks and Investment banks. In most countries, banks are regulated by the national government or central bank.

Bank

An establishment to

• Accept deposits, 

• Pay interest,

• Clear checks,

• Make loans, 

to its customers.

Commercial bank

Commercial banks are the most common type of banks. They conduct their business purely on profit motive. The main function of a commercial bank is to accept deposits from those who have surplus funds and lend on interest to those who require funds.

Commercial bank

The National Bank of Pakistan, the Habib Bank Limited, the Muslim Commercial Bank Limited, the United Bank Limited, are some of the examples of commercial banks in Pakistan.

Industrial banks

The  long-term credit needs of industries

Industrial Development Bank of Pakistan was established in 1961

Agricultural banks

Agricultural banks provide long-term, medium-term and short-term finance to agriculture sector. 

Zarai Taraqiati Bank of Pakistan

Exchange banks 

The exchange banks are those specialized banks which carry on foreign exchange business

In Pakistan some of the commercial banks are authorized to conduct foreign exchange business

Investment banks

Investment banks purchase and sell shares, bonds and securities

Investment Corporation of Pakistan and National Investment Trust Ltd. (N.I.T) are serving as investment banks in Pakistan

Micro-finance banks

The main objectives of micro-finance banks is to provide small loans to small traders

In Pakistan micro-finance banks and Khush-hali bank are the examples of this type of bank

Cheque

No…… Branch …..Date _____

Pay ________________________________A sum of __________________ Rs._______

abcABC

Distinction Between Bill & Cheque

• Bill of exchange

– Bill is Drawn on anyone

– Bill must be Accepted

– 3 days Grace Period sometimes required

• Cheque

– Cheque is Drawn on Bank

– Cheque is not Accepted

– No Grace Period required for Cheque

Distinction Between Bill & Cheque

• Bill of exchange

– If not Presented, Payer discharged

– Notice of Dishonor is Required

– Bill is not Revocable

– Bill is not Crossed

• Cheque

– Till not Presented, Payer Engaged

– No Notice of Dishonor Required

– Cheque is Revocable

– Cheque may be Crossed

Payment Instructions

• Check Present Time at Bank• Application for FIR at Police

When Banker Must Refuse Payment

• Customer Instructions• Customer Death• Customer Insolvent

When Banker Must Refuse Payment

• Customer became Insane• Court Order• Notice of Assignment of Credit Balance

When Banker Must Refuse Payment

• Title Defective• Closer of Account

Next Lecture

Company Law - 1