Renewal of Bill of Exchange

An issuance of new bill by drawer to drawee when drawee is not in a position to meet the first bill is called renewal of bill.

Sometimes, acceptor of a bill finds himself unable to meet his acceptance on the date. thus he could approach the drawer of the bill before the maturity date arrives, to cancel the recent bill and draw a brand new bill with extended date. The acceptor during this case can in fact have to pay interest for the extended period. therefore the cancellation of the old bill maturity reciprocally for a brand new bill (which includes interest) for associate extended period is named "renewal of a bill of exchange".

There are 2 additional ways to renew a bill of exchange:

    The acceptor pays interest in cash and a new bill is accepted equal to the number of the recent bill.

    The acceptor pays an area of the number of the bill in money and accepts a new bill for the balance and interest.