1. Discount is an agreement under which the bank undertakes to pay the value of a commercial paper in advance to its beneficiary in return for transfer of ownership of the paper to the bank. 2. The bank deducts interest on the amount of the paper and a commission from the amount paid to the discount beneficiary. It may be agreed that discount will be made against a lump sum.
Interpretation and application must be checked against the official text and current version.