drew a bill for ...

[pars]

Dear all:
What is the exact meaning of the words in bold in the following passage? It is from the book The East India Company in Persia by Peter Good, p. 145.
An example of the amounts and distances of these transactions can be seen when in 1734, Sankhar drew a bill for 15,000 rupees on the Company in Bombay while also being provided with bills for Bombay himself for 550,000 shahis to cover the Company’s wool investment for that year.

Note: Shahi was a Persian coin in that time.
Many thanks in advance.

 

[Barque]

Would you like to tell us what the relationship between Sankhar and the Company was? In short, context?

Without context, it seems to mean that he issued a bill to the Company for Rs. 15,000, while the Company issued bills to him for 550,000 shahis.

 

[probus]

The bills here are bills of exchange, of which there are three kinds in common law countries: cheques, drafts and promissory notes. A cheque instructs your bank to pay someone else, and a draft instructs it to pay you. So the two bills Shankar drew must have been drafts and the East India Company must have been functioning as a bank at that time.

 

[pars]

Would you like to tell us what the relationship between Sankhar and the Company was? In short, context?

Without context, it seems to mean that he issued a bill to the Company for Rs. 15,000, while the Company issued bills to him for 550,000 shahis.

Hi:
Sankhar was the Company's broker, and according to the text:
The broker would have to have an agent at Bombay for the transaction to work, as well as the capital to support himself through the long wait between being debited in the Gulf and then receiving his credit from India. An example of the amounts and distances....

 

[Barque]

Thank you.

If Sankhar drew a bill of exchange on the Company, the Company's the drawee and is obliged to pay the sum on the bill of exchange to whoever's named as the payee, and the other way round.

 

[5jj]

A cheque instructs your bank to pay someone else, and a draft instructs it to pay you.

A draft instructs the drawee (not necessarily a bank) to pay a sum of money to the payee.

 

[probus]

I suppose you are right @5jj, in a strict sense. But I don't see why one would draw a draft on someone other than a bank. Certainly if someone drew a draft on me, I wiould not pay.

 

[5jj]

it is many years since I have had anything to do with bills of exchange. Back in the 1960s, If I wanted to place an order with the Patel factory in Karachi, I might draw on Bhatia in Lahore, who were placing an order with me, with Patel as the payee. in the days of slow shipping by sea,when instant electronic transfers of money were undreamt of, this made sense.