Bill Of Exchange

Melissa Shirley made this Freedom of Information request to Bank of England

This request has been closed to new correspondence from the public body. Contact us if you think it ought be re-opened.

The request was partially successful.

Dear Bank of England,

I am making this request under the freedom of information 2000 and would like confirmation of the following:

1. Can you confirm that you accept bills of exchange from those who are registered/subscribers with the HM Government.

2. Can you confirm which department at the central bank that the bill of exchange is to be presented to, in relation to the fact that under the bill of exchange act 1882, if a bill of exchange is presented, it must be paid in money to the order of specified person or bearer.

3. Can you also confirm that any bills of exchange that are received by HM government departments, are to be sent to the Bank Of England for payments to be made in cash.

Yours faithfully,

Melissa Shirley

Enquiries, Bank of England

Dear Ms Shirley

We acknowledge receipt of your email dated 26 April below (our ref: CAS-08111-C9K9K5).

We will reply in due course

Yours sincerely

Information Access Team, Communications Directorate
Bank of England | Threadneedle Street | London EC2R 8AH | +44 20 3461 4878

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Enquiries, Bank of England

1 Attachment

Dear Ms Shirley

 

Thank you for your enquiry of 26 April regarding bills of exchange.

 

As you may be aware, the FoI Act provides a general right of access to
recorded information held by a public authority. It does not require a
public authority to answer general questions on a subject as is the case
in this instance. However, in order to be helpful I have provided some
information below.

 

Banks, including the Bank of England, are under no legal obligation to
accept promissory notes or bills of exchange. A bill of exchange is a
document written by a party (maker or drawer) ordering another (drawee) to
pay a certain amount to a third party (payee). It is a
non-interest-bearing written order used primarily in international trade
that binds one party to pay a fixed sum of money to another party at a
predetermined future date. They can be drawn by individuals or banks and
are generally transferable by endorsements binding one party to pay a
third party that was not involved in its creation.

 

However, contrary to what you suggest, the 1882 Act does not state that
someone must accept it. A bill of exchange is an unconditional order to
pay, which requires an acceptance of the drawee before it is presented for
payment. Bills of exchange do not form part of the routine work of the
Bank. The Bank will not necessarily be involved if a government department
makes a bill of exchange, and there is no general obligation for a bill of
exchange to be settled in cash.

 

Turning to your questions, I am afraid it is not quite clear what you mean
by ‘those who are registered/subscribers with the HM Government’. However,
we do not disclose specific details of the banking services we offer to
Government.

 

Kind regards

 

Charles

Engagement and Enquiries | Communications

Bank of England|Threadneedle St|London EC2R 8AH|+44 (0)20 3461 4878

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[2]Bank of England

 

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