Question -
Answer -
Retirement of bill of exchange happens when the holder of the bill of exchange receives a payment from acceptor before the accepted maturity date of the bill. In such cases the bill holder provides some discount to the acceptor and such a discount offered is called “rebate”.
The following are the benefits of retiring of a bill of exchange for debtor and creditor:
1. Improves the trust between two parties in transaction, namely, debtor and creditor.
2. Allows creditor to use the money for further business
3. Rebate provided by creditor becomes revenue for debtor
4. More business transactions can be conducted between two parties.