Bank Rate is that rate at which central bank of a country provides refinancing facilities to commercial banks.

• The bank rate, a benchmark rate at which RBI buys or re-discounts bills of exchange or other commercial papers eligible for purchase.
• Every bank needs refinancing as it is very difficult to match borrowings and flow of deposits.
• Higher bank rate will translate to higher lending rates by the banks.
• In order to curb liquidity, the central bank can resort to raising the bank rate and vice versa.

•   A bill of exchange is a written order binding one party to pay a fixed sum of money to another party on demand or at a predetermined date.

•   It is a written document outlining a debtor's indebtedness to a creditor.

•   A bill of exchange is used in international trade to help importers and exporters fulfill transactions.

•   While a bill of exchange is not a contract itself, the involved parties can use it to specify the terms of a transaction, such as the credit terms and the rate of accrued interest.

•   A bill of exchange transaction can involve up to three parties.

•   It can specify that payment is due on demand or at a specified future date.