Sometimes the drawee of a bill is unable to pay the bill amount on the due date and he may request the drawer to allow him some extra time. If the drawer is agreed to the proposal of the drawee, the old bill is cancelled and a new bill is drawn for the extended period. The process of canceling the old bill and drawing a new bill is called Renewal of the bill. When a bill is renewed, the drawee is liable to pay interest to the drawer for the extended period (from the old due date to the new due date).
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