Instruments
FINBANK
Promises to Pay
Orders to Pay
Promises to Pay
Promissory Note
Simplest form of credit instrument
An unconditional promise of the maker
to pay a sum certain in money to order
or to bearer on demand at a future
determinable time.
Collateral promissory note the note is
secured
Promises to Pay
Bank Note
Unconditional promise of a bank to pay
a sum certain in money on demand.
Used as a substitute for money and is
exchanged in standard money at par,
provided that the bank issuing it enjoys
excellent credit standing
A direct obligation of the issuing bank
Promises to Pay
Banks Acceptance
Contains the banks promise to pay a
draft that is presented to it for
acceptance
The word ACCEPTED is stamped on the
face of the draft and it is duly signed by
the banks representative.
The date of acceptance is also indicated.
Promises to Pay
Letter of Credit
A promise of a bank to honor drafts
drawn against it or for its account.
A bank substitutes its credit for that of
the accredited buyer and promises to
pay the beneficiary or his representative
upon presentation of a draft, subject to
the conditions in the letter of credit.
Orders to Pay
Bill of Exchange
An order of one person/ bank to another
person or bank to pay a third person a
sum certain in money or demand or at
some specified future time.
Also in the form of a check or a draft.
Orders to Pay
Check
An order of a depositor to his bank to pay a
third person or himself a sum certain in money
on demand.
Commonly known as personal check.
Cashiers check banks cashier is the drawer
of the check
Managers check Manager of a business
concern is the drawer
Orders to Pay
NOW Account
Negotiable Order of Withdrawal
Earn interest and account holders can write as
many NOW checks as they want on the account
Has a feature of a savings deposit as it earns
interest
Like current/ checking account it offers
depositors the convenience od issuing checks for
payments.
No need for a passbook in depositing or
withdrawing
Orders to Pay
Draft
Order to pay and is a bill of exchange
Classification
Demand drafts paid as sight upon
presentation
Time drafts payable at future determinable
time
Commercial or trade draft when the draft is
drawn by a merchant against another
Bank draft Drawn by a bank against
another bank
Promise to Pay
Orders to Pay
Subject to certification
Drawn on bank
Orders to pay
Payable
either
on
demand or at a future
determinable time
Subject to acceptance
Drawn on a merchant or
a bank
of
Timothy Bunyi
Nia Floralde
Maria Jana Minela Ilustre
Kathrina Patea
Mariecon Robles