There are two types of bank bills:
– bank accepted bills
– bank endorsed bills
A bank accepted bill, is a bill of exchange where the issuing bank has a liability to pay the holder the face value of the bill at maturity. The parties involved are the bank as acceptor and a borrower as drawer. In certain circumstances, the liability is contingent on the borrower, or the drawer, defaulting Bank endorsed bills have a 100% bank guarantee. In the event of default the first call for payment is back to the drawer of the bill, then, if the drawer fails to pay, the holder will present to the bank for payment.