Banker’s Acceptances

A financial instrument issued by banks that guarantees payment of a specific amount at a future date, typically used in international trade. The bank accepts a time draft from an importer and promises to pay the exporter, making it safer for exporters to trade while giving importers time to receive and process goods before paying.

"The importer arranged for banker's acceptances to finance the purchase of raw materials from overseas, providing the exporter with guaranteed payment while allowing time for shipping and processing.”