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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 longterm, medium-term and shortterm 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 Pakist
an and National Investment
Trust Ltd. (N.I.T) are serving
as investment banks in Pakistan
Micro-finance banks
The main objectives of microfinance 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._______
abc
ABC
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