Question -
Answer -
The following steps discusses the procedure of calculating bill of exchange maturity date:
1. Determine the due date of the bill as per terms of bills of exchange.
2. Grace period of three days must be added to the due date to arrive at maturity date.
For e.g., a bill having due date of 30 days (a month) is drawn on 1st August then due date is 1st September. Adding 3 grace period we arrive at bill maturity and payment due date which is on 4th October.
Calculation of Days of grace period depends on these situations:
1. Known Holidays: If due date for payment falls on a national holiday or on a Sunday, then payment need to be processed the following day. The following examples will make it easier to understand.
1. A bill that is drawn on 23rd December with due date of 23rd January, adding the grace period (3 days) the maturity date comes to 26th January. However, as 26th January is a national holiday; so, 25th January becomes the due date for payment.
2. A bill is drawn on 1st June with maturity period of a month, the due date arrived is 1st July. On adding 3 days of grace, the payment due date is 4th July. However, if 4th July is a Sunday, in this case payment needs to be completed on 3rd July.
2. Unexpected holidays: If due date for payment falls on an holiday due to emergency, then the next day becomes the day on which payment needs to be done. For example, a bill drawn on 1st May with a term of 20 days, then, adding grace period of 3 days, the payment due date becomes 24th May. But, if a nationwide strike gets declared on 24th May, then 25th May is the new due date for the payment of the bill as per rules.