Finance, Forex and Investments

Can anybody please explain what bill rediscounting by commercial banks means?

Public Comments

1. Assume you are a businessman.When you sell on credit, you have to wait to get the money from the buyer for sometime.But if you need money in the meantime, you can approach a bank and they will pay the amout less their commision.They will collect from the buyer in time.
2. (Courtesy) :Keshav raman says in the previous posting :- " Assume you are a businessman.When you sell on credit, you have to wait to get the money from the buyer for sometime.But if you need money in the meantime, you can approach a bank and they will pay the amount less their commission.They will collect from the buyer in time " .... this is for 'discounting' ... right. Now the question of "Re-discounting" ....!! Now, this bank which has 'discounted' the bills may require to get it 'rediscounted' with some other banks to tide over their fund position. In India : Reserve Bank of India, NA BARD. SID BI etc. allow the banks to re discount such bill with them and provide the fund. Conditions apply : Other things are similar. ............Thanks to Keshav raman for the inputs.