Define explain the following concepts. 4. Discounting of bills

Define explain the following concepts.
4. Discounting of bills
Answer: 

Discounting of bills: The commercial banks provide financial assistance to the business community by discounting bills of exchange. A bill of exchange is a document that acknowledges the amount of money that is owed by the debtors as against the goods and services received by them. The banks purchase these bills produced by the customers after deducting interest on the face-value of the bill.

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