Multiple choice

When a bill is discounted through bank, which of the following conditions is correct?

  1. The bank will not get the title of holder in due course.

  2. The bank will become the payee.

  3. The bank will receive the amount after deducting the interest charged by the bank at the time of discounting the bill.

  4. The bank will become the drawer.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The bank will get the title of holder in due course, the bank will become the payee and not the drawer. The bank will receive the full payment, no amount as interest will be deducted. 

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