This document discusses various types of credit instruments such as checks, bank drafts, bills of exchange, promissory notes, government bonds, and treasury bills. It outlines their key characteristics and compares advantages like encouraging savings and capital formation to disadvantages like potential overspending. The role of credit in the economy is also examined, noting how it can facilitate large-scale production, shift capital to productive uses, and increase savings rates.

1. 1) Credit Instruments
2) Advantages of Credit
3) Disadvantages of Credit
4) Role of Credit in Economy
5) Concept of Credit Management

2. A credit is a instrument is term used in he banking and
finance world to describe an time agreed upon that can be
used as a currency.
Classification:
1. Cheque
2. Bank Draft
3. Bill of Exchange
4. Promissory Note
5. Government Bond
6. Treasury Bills
7. Traveler's Cheque

3.  A cheque should be in writing and properly signed by the drawer.
 A cheque contains an unconditional order.
 A cheque issued on a specified banker only.
 The amount specified is always certain and should be clearly
mentioned both in figures and words
Bank Draft
 Drawn on another office of the same bank;
 It is payable on demand; and
 Its payment has to be made to the person whose name is
mentioned therein or according to his order.

4. Bill of Exchange
 A bill of exchange to be valid must fulfill the following
requirements:
 The instrument must be in written and must be signed by the
drawer.
 The amount of money to be paid must be certain contain an order
to pay.
 The payment must be in the legal tender currency of country.
 Money must be paid to a definite person and properly stamped.

5. Promissory Note
 The promissory note must be in writing.
 It must contain an express promise.
 The payee must be certain.
 It should be signed by the maker.
 The amount must be certain.

6. Set Maturity Dates
Interest Payments.
Issue Price
Liquidity

7. Treasury Bills
 Maturity time Period less than 1 year
 High Liquidity
 Low Risk

8. Uses peoples on vocation in foreign countries
instead of cash.
 Used o avoid risk of having cash .

9. Advantages Disadvantages
 Exchange of Ownership.
 Employment
Encouragement
 Increase Consumption
 Saving Encouragement
 Capital Formation
 Easy Payment
 Development of
Entrepreneurs
 Encouragement of
Expenditure
 Encourage weakness
 Danger beyond limit
 Encourage Inefficient
 Economic Crises

10.  Large Scale Production
 Shifting Of Capital To Productive Purposes
 Provision Of Working Capital
 Emergency Of New Businessman
 International Payments
 Increases In Saving Rate
 Purchase Of Goods