A clean bill of exchange, usually of 60 days' tenor or over, drawn by a bank or banker in one country on a bank or banker in another for the purpose of raising funds and especially when the interest rates in the country on which the bill is drawn are lower than in the country where the bill is drawn. Finance bills are not drawn against the shipment of goods; they are bankers' bills as distinguished from COMMERCIAL BILLS. They are sometimes drawn against balances maintained with the drawee bank but more often are not, being in the nature of an advance from a bank in one country to a bank in another. Finance bills are usually unsecured (up to a maximum limit), but sometimes bonds, stocks, or other collateral is pledged as security. The drawee bank accepts a finance bill for a fixed commission, but only of course when the drawing bank enjoys a high credit rating. Thus a finance bill is drawn for the purpose of raising funds to establish additional balances at home or abroad.
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