July 25, 2020

Legal amount/Currency Notes/Bill of exchange/ Promissory note/Courtesy amount

  Legal amount and Courtesy amount

Legal Amount:- The amount in words is called the legal amount as per CTS(Cheque Truncation System) 2010 gudilines of RBI.

Courtesy Amount:- The amount in figure is called the courtesy amount as per CTS 2010 guidelines of RBI.

Currency Notes and Promissory Note

Currency notes being money, though full fill a number of promissory notes, are not promissory notes and have been excluded from the definition of u/s Section 4 of Negotiable Instrument Act and are governed by Indian Currency Act Section 21, Promissory note is an instrument (a) in writing, (b) containing an unconditional promise, (c) signed by maker (d) to pay certain sum of money, (e) to or to the order of a certain 'person' or the 'bearer' of the instrument.

Bill of Exchange and Promissory note made payable to bearer-

As per section 31 of RBI Act, persons other than RBI or Central Government can draw, accept, make or issue any bill of exchange or promissory note payable to bearer on demand.
Promissory note definition comes under Negotiable instrument act 1881-section 4, Bill of exchange definition comes under Section 5 of Negotiable instrument act 1881.

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