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The bill received wide circulation in inter-farm and interbank circulation, it can rightfully be considered the first European payment instrument. Historically, a bill (in German - "exchange") arose in the XII-XIV centuries in Florence as an exchange letter addressed to a banker in another city with an instruction to give the bearer of this paper an amount in foreign currency equivalent to that which the merchant paid in Florence, in the local currency. This form of settlement ("exchange letter") reduced the risk of losing money or robbery. Bankers subsequently settled their settlements by offsetting counterclaims [Shmelev, 2006 |.
At first, the bill performed mainly payment functions, when all issued bills were covered with coins, which the banks accepted for safekeeping. Then he became an instrument for providing credit. The spread of promissory notes in economic circulation required the development of generally accepted rules for the issue, circulation and payment of this type of securities. A bill of exchange law arose. The Bill of Exchange Act, adopted in England in 1882, had a great influence on the development of the legal basis for circulation of bills of exchange. Its laws on bills of exchange were adopted at the end of the 19th century and in other European countries - Belgium, Italy, Norway , Prussia, Sweden, etc. In modern conditions, legislation on bills is part of commercial law.
The active use of bills of exchange in international trade contributed to the formation of international norms of bill of exchange law. In 1930, the “Uniform Bill and Bill of Exchange Act” was adopted in Geneva. It is used in the legislation of many countries, in particular Germany, Belgium, Austria, Scandinavian countries, Denmark, France, the Netherlands, as well as Russia and the CIS countries, a number of countries in Asia, Africa and Latin America.
Countries using English law (Great Britain, the United States and countries in their sphere of influence - India, Canada, Cyprus, New Zealand, South Africa, etc.) have not joined the document. In addition, a number of countries use the provisions of French law laid down by the Napoleonic code (France, Spain, Egypt, Iran, a number of African and Asian countries).
Some important features of a bill of exchange should be pointed out .
I. First, a bill of exchange is a written document; it cannot exist in uncertificated form. In order for a bill of exchange to have legal force, the law provides for the basic details of the bill. The bill must have:
It should be noted that the laws of some countries allow the inclusion in the text of the bill of exchange a reference to the number of the contract or letter of credit under which the bill of exchange was issued, but this does not change the unconditional nature of the bill.
III. A bill can serve as a means of both bank and commercial lending. In the first case, it is a bank bill. He certifies that the client of the bank (say, an enterprise) has made a deposit to the bank in the amount of the bill and the bank undertakes to pay this amount upon presentation of the bill within the period specified in it. The bill is sold to the customer at a discount. The client can use the bill of exchange for settlements with other counterparties. A bill of exchange can change hands along a chain of payments. In Russian practice, such promissory notes were actively used for settlements during the payment crisis of the late 1990s. The bank received income from the sale of promissory notes at a discount (the name of the bank mattered, which made the promissory note acceptable for circulation). Much more widespread in world practice have receivedcommercial bills. In addition to the payment function, they served as an instrument for lending one industrial or commercial enterprise to another in the form of a deferred payment for goods and services.
Depending on the legal relationship of the participants in a bill of exchange transaction, simple and bills of exchange are distinguished. A promissory note is a firm and unconditional obligation of the drawer (for example, the buyer of the goods) to pay the drawer (seller) a specified amount on demand or on a fixed date. As a rule, 2 persons are involved in the operation: the drawer and the drawer (remitter).
The settlement scheme using a promissory note (taking into account Russian conditions) is as follows (see Fig. 2.4):
turnover can occur without the participation of the bank.
A bill of exchange draft is an unconditional written order of a person (drawer, drawer), having written
The scheme of settlements with the help of a bill of exchange is a bill of exchange to another person (payer, drawee) for payment on demand or on a fixed date of a certain amount of money to a third party (beneficiary or remitter).
In the case of using a bill of exchange, three parties are involved in the transaction (Figure 2.5):
The settlement scheme with the bill of exchange gumoshyo gives its obligations to pay the bill. The drawer, on the other hand, has a conditional obligation: he must pay the bill of exchange if the drawer did not accept it or did not accept it, but did not pay. The simple signature of the drawee on the bill is also considered an acceptance.
A guarantee of payment of a bill in full or in part can be given by a third party - an avist. If the avalist has vouched for the payer or endorser of the bill, then he bears joint and several liability with him. If the avalist in the document did not indicate who he vouched for, then it is considered that the aval was given for the drawer. In the text of the bill, the aval can be represented by the phrase “I guarantee payment” or “count as an aval” or by the signature of the avalist on the face of the bill. Aval as a form of surety was introduced by the Napoleonic Code and adopted in the countries of continental Europe, but is not recognized by English and American law. The drawer of a bill of exchange can simultaneously be the payee (that is, the recipient of the bill). In this case, the text of the bill indicates "pay me or my order ...".
Let's highlight a number of key features of a promissory note versus a bill of exchange:
and the payer performs the same bank, a bank draft (banker's draft). This is a very reliable settlement tool, which in terms of liquidity can be equated to cash. It is not a check, since when a bank draft is used, the drawer and the payer are the same person. This instrument has traditionally been used to transfer large amounts of money, for example, within one bank, whose branches are geographically far from the head office. Currently, the functions of a bank draft are mainly carried out by transfers in automated banking systems.
As a negotiable instrument, the bill can be passed a bill holder (endorser) to another person (the transferee) for endorsement on the back of the bill - the endorsement (in French "to" - back). In this case, the endorsee receives all the rights and risks under the bill as the legal holder of the bill. However, the endorser is responsible for the acceptance of the bill and for the payment. He can absolve himself of responsibility by means of the inscription “without recourse to us”. Naturally, the next purchaser of the bill will take this into account when purchasing the bill. In turn, the endorser himself can transfer the bill to another person according to the transfer inscription on the back of the bill. In this case, he becomes an endorser.
There are four main types of endorsements:
Another concept of bill practice is domiciliation. This term means payment of a bill on time in a specified place (domicile - place of residence). Typically, domiciliation consists in the designation of a third party by the payer of the bill of exchange, usually a bank serving the payer. The domicile bank is not responsible for the bill; it performs the service of paying the bill on time on behalf of the payer. The bank's goal is not to miss the due date.
An important service that a bank can provide to participants in a bill circulation is bill collection. If, upon domiciliation, the bank pays the bill of exchange, then upon collection it presents it for collection. The first operation - domiciliation - is carried out on behalf of the payer, the second - collection - on behalf of the holder of the bill. The latter puts a collection endorsement on the bill - the inscription "for collection" or "to receive payment." The bank presents a bill of exchange for payment and charges a commission for the operation (in% to the payment amount). In case of refusal to pay the bill, the bank protests the bill. After the protest of the bill, certified by a notary, the bank returns it to the holder, who now has every reason to go to court.
Commercial banks can record bills of exchange. As a rule, banks take into account short-term bills, which are issued mainly for commodity and commercial transactions. The holder of the bill of exchange can sell the bill to the bank, as a result of this the bill, as well as the right to demand payment on it, will be fully at the disposal of the bank. The holder of a bill immediately receives payment on the bill of exchange before the actual date of payment on it.
In this regard, the accounting of a bill is attributed to the bank's credit operation. For the accounting of a bill of exchange, a commercial bank receives interest, which is called a discount interest or discount. The discount rate makes it possible to estimate the amount of the discount from the face of the bill, which depends on the period before the payment of the bill of exchange and on the financial and economic position of the payer on the bill. Commercial banks can use the official discount rate set by the central bank in transactions with commercial banks and other financial intermediaries as a guideline for determining the discount.
When accounting for a bill, commercial banks indicate the discount rate as a percentage per annum to the face value of the bill. The ruble equivalent of the discount rate can be obtained using the following formula | Burenin, 2002, p. 121 - 1231:
where d is the bill of exchange discount; N is the denomination of the bill; с1 - discount rate (discount rate on the promissory note); / - the number of days from the date of purchase of the bill to its redemption.
Due to the fact that settlements with a bill of exchange are carried out on the basis of a fiscal year equal to 360 days, a base of 360 days is used in the denominator of formula (1).
If there is information about the size of the discount, the price of the bill can be found:
where P is the price of the bill.
Despite the fact that the discount interest can characterize the level of profitability of a bill of exchange, it does not allow us to directly compare the yield of a bill of exchange with the yield of other securities for the following reasons. Firstly, the calculation of the amount of the discount is carried out on the basis of 360 days, and secondly, when calculating the yield of a bill of exchange, the amount of the discount refers to the face value (see formula 3):
Both of the above reasons understate the true yield of the bill. Consequently, it is required to recalculate the discount rate into financial instrument yields on a 365-day basis and take into account the promissory note price. Thus, the equivalent rate of return on the bill can be found from Equation 4:
where r is the equivalent rate of return or
The parties can extend the term for payment of the bill, i.e. to carry out the prolongation of the bill. Prolongation of a bill is direct, simple and indirect. In the case of a direct prolongation of a bill of exchange, a corresponding entry on the bill is drawn up, certified by the signatures of the parties. With a simple renewal, such an entry is not made. With an indirect prolongation, a new bill of exchange is drawn up, and the old one is withdrawn from circulation.
The closing of an accounting loan - a loan to the holder of a bill by buying (accounting) a bill of exchange by the bank before the due date - is made on the basis of the bank's notifications of payment of the bill.
Settlements by means of a bill of exchange are widely used not only within one country, but also in foreign trade. Here, the draft can act as a lending instrument and as a means of debt settlement. The bill of exchange is beneficial for the buyer of the goods, since the buyer receives a deferred payment: he has time to mobilize the necessary funds by selling the purchased goods. The seller who has received a bill of exchange in payment for the goods shipped has three options:
When banks accept drafts that are put on them by commercial banks of another country, then we are talking about the so-called "acceptance-reimbursement credit". Ramburs (from the English. Reimburse) is a payment for the purchased goods through the intermediary of a bank in the form of acceptance by the bank of the importer of drafts issued by the exporter. Banks of other countries play an auxiliary role here: they assume responsibility to banks accepting drafts for timely reimbursement(i.e. transfer) to their accounts in the currency required to pay the accepted drafts. The term, limit, interest rate on the acceptance and reimbursement loan are set in the course of a preliminary interbank agreement. At the same time, the method of repayment by the importer's bank of its own debt is determined.
In Russia, the non-payment crisis in the mid-90s led to a kind of promissory note boom. Bills were used to decouple payments. The issue of promissory notes was carried out by both the government and financial organizations and commercial firms. The circulation of promissory notes in Russia is regulated by the Federal Law “On bills of exchange and promissory notes”. Today, the amount of bills recorded (purchased) by credit institutions reaches 234 billion rubles [Bank of Russia, 2010a]. The turnover of commercial bills (on the basis of mutual lending to enterprises) is small due to a number of reasons, the main among which are insufficient solvency and reliability of domestic companies, low discipline of debtors, lack of a clear procedure for judicial debt collection, abuse, etc. The share of bills of exchange in Russia is small. The overwhelming majority of the issued promissory notes are promissory notes on a discount basis. Such a bill is paid by the drawer at the end of the circulation period of the bill.
At first, the bill performed mainly payment functions, when all issued bills were covered with coins, which the banks accepted for safekeeping. Then he became an instrument for providing credit. The spread of promissory notes in economic circulation required the development of generally accepted rules for the issue, circulation and payment of this type of securities. A bill of exchange law arose. The Bill of Exchange Act, adopted in England in 1882, had a great influence on the development of the legal basis for circulation of bills of exchange. Its laws on bills of exchange were adopted at the end of the 19th century and in other European countries - Belgium, Italy, Norway , Prussia, Sweden, etc. In modern conditions, legislation on bills is part of commercial law.
The active use of bills of exchange in international trade contributed to the formation of international norms of bill of exchange law. In 1930, the “Uniform Bill and Bill of Exchange Act” was adopted in Geneva. It is used in the legislation of many countries, in particular Germany, Belgium, Austria, Scandinavian countries, Denmark, France, the Netherlands, as well as Russia and the CIS countries, a number of countries in Asia, Africa and Latin America.
Countries using English law (Great Britain, the United States and countries in their sphere of influence - India, Canada, Cyprus, New Zealand, South Africa, etc.) have not joined the document. In addition, a number of countries use the provisions of French law laid down by the Napoleonic code (France, Spain, Egypt, Iran, a number of African and Asian countries).
Some important features of a bill of exchange should be pointed out .
I. First, a bill of exchange is a written document; it cannot exist in uncertificated form. In order for a bill of exchange to have legal force, the law provides for the basic details of the bill. The bill must have:
- 1) bill label: the word "bill" is included in the title and text of the document (according to American law, it is enough that the name "bill" was mentioned only in the text of the document);
- 2) the place of drawing up the bill;
- 3) the time of drawing up the bill;
- 4) a promise or order to pay a certain amount of money;
- 5) the bill of exchange - in figures and in words;
- 6) due date for payment;
- 7) place of payment (domicile);
- 8) the name of the recipient of money (payee) or beneficiary;
- 9) the signature of the drawer, the seal.
It should be noted that the laws of some countries allow the inclusion in the text of the bill of exchange a reference to the number of the contract or letter of credit under which the bill of exchange was issued, but this does not change the unconditional nature of the bill.
III. A bill can serve as a means of both bank and commercial lending. In the first case, it is a bank bill. He certifies that the client of the bank (say, an enterprise) has made a deposit to the bank in the amount of the bill and the bank undertakes to pay this amount upon presentation of the bill within the period specified in it. The bill is sold to the customer at a discount. The client can use the bill of exchange for settlements with other counterparties. A bill of exchange can change hands along a chain of payments. In Russian practice, such promissory notes were actively used for settlements during the payment crisis of the late 1990s. The bank received income from the sale of promissory notes at a discount (the name of the bank mattered, which made the promissory note acceptable for circulation). Much more widespread in world practice have receivedcommercial bills. In addition to the payment function, they served as an instrument for lending one industrial or commercial enterprise to another in the form of a deferred payment for goods and services.
Depending on the legal relationship of the participants in a bill of exchange transaction, simple and bills of exchange are distinguished. A promissory note is a firm and unconditional obligation of the drawer (for example, the buyer of the goods) to pay the drawer (seller) a specified amount on demand or on a fixed date. As a rule, 2 persons are involved in the operation: the drawer and the drawer (remitter).
The settlement scheme using a promissory note (taking into account Russian conditions) is as follows (see Fig. 2.4):
- 1. The supplier has completed the work, delivered the goods.
- 2. The buyer has written a bill of exchange in the name of the supplier and has accepted it in his bank. Acceptance is marked on the face of the bill of exchange with the words “accepted” or “accepted”. You can present a bill for acceptance at any time from the moment the bill is issued until the due date.
- 3. The buyer has delivered the bill to the supplier.
- 4. The supplier handed over the bill of exchange for accounting (purchase) to his bank.
- 5. The bank took into account the supplier's bill of exchange and credited the bill to his current account.
- 5a. The bank handed the supplier a statement of his current account.
- 6. The supplier's bank presented the bill for payment on time.
- 7. The buyer's bank paid the bill from the buyer's current account.
- 8. Transfer of funds by promissory note to the supplier's bank.
turnover can occur without the participation of the bank.
A bill of exchange draft is an unconditional written order of a person (drawer, drawer), having written
The scheme of settlements with the help of a bill of exchange is a bill of exchange to another person (payer, drawee) for payment on demand or on a fixed date of a certain amount of money to a third party (beneficiary or remitter).
In the case of using a bill of exchange, three parties are involved in the transaction (Figure 2.5):
- - drawer (drawer) - the person who issued the bill and gave the order for its payment;
- - the payer of the bill (drawee) - the person to whom the order to pay the bill is addressed;
- - recipient of money under a bill of exchange (beneficiary) - a person who presents a bill of exchange for payment and receives money under it.
- 1. The drawer (drawer) pays with the bill of exchange to the recipient of the money (beneficiary, remitter).
- 2. The payee presents the bill of exchange to the payer (drawee) for acceptance.
- 3. After acceptance, the drawee shall return the bill of exchange to the payee.
- 4. The payee presents the bill of exchange to the drawee for payment at the due date.
- 5. Trassat pays the bill by making a note of payment on its reverse side.
The settlement scheme with the bill of exchange gumoshyo gives its obligations to pay the bill. The drawer, on the other hand, has a conditional obligation: he must pay the bill of exchange if the drawer did not accept it or did not accept it, but did not pay. The simple signature of the drawee on the bill is also considered an acceptance.
A guarantee of payment of a bill in full or in part can be given by a third party - an avist. If the avalist has vouched for the payer or endorser of the bill, then he bears joint and several liability with him. If the avalist in the document did not indicate who he vouched for, then it is considered that the aval was given for the drawer. In the text of the bill, the aval can be represented by the phrase “I guarantee payment” or “count as an aval” or by the signature of the avalist on the face of the bill. Aval as a form of surety was introduced by the Napoleonic Code and adopted in the countries of continental Europe, but is not recognized by English and American law. The drawer of a bill of exchange can simultaneously be the payee (that is, the recipient of the bill). In this case, the text of the bill indicates "pay me or my order ...".
Let's highlight a number of key features of a promissory note versus a bill of exchange:
- - A promissory note is not an order, but an obligation to pay.
- - In the case of a promissory note, the drawer and the payer are the same person.
- - A promissory note does not need an acceptance.
and the payer performs the same bank, a bank draft (banker's draft). This is a very reliable settlement tool, which in terms of liquidity can be equated to cash. It is not a check, since when a bank draft is used, the drawer and the payer are the same person. This instrument has traditionally been used to transfer large amounts of money, for example, within one bank, whose branches are geographically far from the head office. Currently, the functions of a bank draft are mainly carried out by transfers in automated banking systems.
As a negotiable instrument, the bill can be passed a bill holder (endorser) to another person (the transferee) for endorsement on the back of the bill - the endorsement (in French "to" - back). In this case, the endorsee receives all the rights and risks under the bill as the legal holder of the bill. However, the endorser is responsible for the acceptance of the bill and for the payment. He can absolve himself of responsibility by means of the inscription “without recourse to us”. Naturally, the next purchaser of the bill will take this into account when purchasing the bill. In turn, the endorser himself can transfer the bill to another person according to the transfer inscription on the back of the bill. In this case, he becomes an endorser.
There are four main types of endorsements:
- - Blank endorsement (to bearer) - the holder of the bill puts his signature on the back, as a result of which the bill becomes a bearer document. Any legal owner of this bill of exchange can receive money on it.
- - Nominal (full) endorsement - the holder of the bill puts his signature on the back and indicates the name of the person to whom the right to receive money under the bill is transferred.
- - Reassignment (collection) endorsement - the holder of the bill transfers the bill to a new person indicating the operations that he asks to perform on this bill, for example, collect or protest the bill, transfer it as a pledge, register the bill.
- - Security endorsement - the holder of the bill transfers to the endorser the security rights to the bill by indicating on the bill of exchange “currency as security” or “currency as a pledge”.
Another concept of bill practice is domiciliation. This term means payment of a bill on time in a specified place (domicile - place of residence). Typically, domiciliation consists in the designation of a third party by the payer of the bill of exchange, usually a bank serving the payer. The domicile bank is not responsible for the bill; it performs the service of paying the bill on time on behalf of the payer. The bank's goal is not to miss the due date.
An important service that a bank can provide to participants in a bill circulation is bill collection. If, upon domiciliation, the bank pays the bill of exchange, then upon collection it presents it for collection. The first operation - domiciliation - is carried out on behalf of the payer, the second - collection - on behalf of the holder of the bill. The latter puts a collection endorsement on the bill - the inscription "for collection" or "to receive payment." The bank presents a bill of exchange for payment and charges a commission for the operation (in% to the payment amount). In case of refusal to pay the bill, the bank protests the bill. After the protest of the bill, certified by a notary, the bank returns it to the holder, who now has every reason to go to court.
Commercial banks can record bills of exchange. As a rule, banks take into account short-term bills, which are issued mainly for commodity and commercial transactions. The holder of the bill of exchange can sell the bill to the bank, as a result of this the bill, as well as the right to demand payment on it, will be fully at the disposal of the bank. The holder of a bill immediately receives payment on the bill of exchange before the actual date of payment on it.
In this regard, the accounting of a bill is attributed to the bank's credit operation. For the accounting of a bill of exchange, a commercial bank receives interest, which is called a discount interest or discount. The discount rate makes it possible to estimate the amount of the discount from the face of the bill, which depends on the period before the payment of the bill of exchange and on the financial and economic position of the payer on the bill. Commercial banks can use the official discount rate set by the central bank in transactions with commercial banks and other financial intermediaries as a guideline for determining the discount.
When accounting for a bill, commercial banks indicate the discount rate as a percentage per annum to the face value of the bill. The ruble equivalent of the discount rate can be obtained using the following formula | Burenin, 2002, p. 121 - 1231:
where d is the bill of exchange discount; N is the denomination of the bill; с1 - discount rate (discount rate on the promissory note); / - the number of days from the date of purchase of the bill to its redemption.
Due to the fact that settlements with a bill of exchange are carried out on the basis of a fiscal year equal to 360 days, a base of 360 days is used in the denominator of formula (1).
If there is information about the size of the discount, the price of the bill can be found:
where P is the price of the bill.
Despite the fact that the discount interest can characterize the level of profitability of a bill of exchange, it does not allow us to directly compare the yield of a bill of exchange with the yield of other securities for the following reasons. Firstly, the calculation of the amount of the discount is carried out on the basis of 360 days, and secondly, when calculating the yield of a bill of exchange, the amount of the discount refers to the face value (see formula 3):
Both of the above reasons understate the true yield of the bill. Consequently, it is required to recalculate the discount rate into financial instrument yields on a 365-day basis and take into account the promissory note price. Thus, the equivalent rate of return on the bill can be found from Equation 4:
where r is the equivalent rate of return or
The parties can extend the term for payment of the bill, i.e. to carry out the prolongation of the bill. Prolongation of a bill is direct, simple and indirect. In the case of a direct prolongation of a bill of exchange, a corresponding entry on the bill is drawn up, certified by the signatures of the parties. With a simple renewal, such an entry is not made. With an indirect prolongation, a new bill of exchange is drawn up, and the old one is withdrawn from circulation.
The closing of an accounting loan - a loan to the holder of a bill by buying (accounting) a bill of exchange by the bank before the due date - is made on the basis of the bank's notifications of payment of the bill.
Settlements by means of a bill of exchange are widely used not only within one country, but also in foreign trade. Here, the draft can act as a lending instrument and as a means of debt settlement. The bill of exchange is beneficial for the buyer of the goods, since the buyer receives a deferred payment: he has time to mobilize the necessary funds by selling the purchased goods. The seller who has received a bill of exchange in payment for the goods shipped has three options:
- - either keep the bill until the due date;
- - to use this bill of exchange as a means of payment for the supply of goods for their counterparties;
- - sell the promissory note to the bank and receive the amount less the discount on it ahead of schedule.
When banks accept drafts that are put on them by commercial banks of another country, then we are talking about the so-called "acceptance-reimbursement credit". Ramburs (from the English. Reimburse) is a payment for the purchased goods through the intermediary of a bank in the form of acceptance by the bank of the importer of drafts issued by the exporter. Banks of other countries play an auxiliary role here: they assume responsibility to banks accepting drafts for timely reimbursement(i.e. transfer) to their accounts in the currency required to pay the accepted drafts. The term, limit, interest rate on the acceptance and reimbursement loan are set in the course of a preliminary interbank agreement. At the same time, the method of repayment by the importer's bank of its own debt is determined.
In Russia, the non-payment crisis in the mid-90s led to a kind of promissory note boom. Bills were used to decouple payments. The issue of promissory notes was carried out by both the government and financial organizations and commercial firms. The circulation of promissory notes in Russia is regulated by the Federal Law “On bills of exchange and promissory notes”. Today, the amount of bills recorded (purchased) by credit institutions reaches 234 billion rubles [Bank of Russia, 2010a]. The turnover of commercial bills (on the basis of mutual lending to enterprises) is small due to a number of reasons, the main among which are insufficient solvency and reliability of domestic companies, low discipline of debtors, lack of a clear procedure for judicial debt collection, abuse, etc. The share of bills of exchange in Russia is small. The overwhelming majority of the issued promissory notes are promissory notes on a discount basis. Such a bill is paid by the drawer at the end of the circulation period of the bill.
