DEFINITION of 'No Protest - NP'

When a bank receives instructions from another bank not to protest items in the event that a negotiable instrument is not paid or accepted. The collecting bank is not liable for nonpayment or non-acceptance when attempting to obtain payment according to the payment terms of the draft instrument.

BREAKING DOWN 'No Protest - NP'

When instructing a collecting bank to not protest items for nonpayment the sending bank will stamp "NP" on the draft. The collecting bank is allowed to send items stamped with NP back to the sending bank in the event of nonpayment.

RELATED TERMS
  1. Bank Draft

    A type of check where the payment is guaranteed to be available ...
  2. Nonpar Item

    A check, draft or negotiable instrument that a paying bank honors ...
  3. Demand Draft

    A method used by individuals to make transfer payments from one ...
  4. Negotiable

    1. Describing the price of a good or security that is not firmly ...
  5. Instructing Bank

    One of the banks that plays a role in a transfer of funds between ...
  6. Bank Endorsement

    An endorsement by a bank for a negotiable instrument, such as ...
Related Articles
  1. Personal Finance

    What's a Bank Draft?

    A bank draft is a type of check. The bank guarantees payment, making it a more attractive option for the check recipient.
  2. Personal Finance

    Banker's Acceptance 101

    A banker's acceptance, a common way of financing international trade activity, provides a relatively safe, short-term vehicle for investors. An acceptance is a negotiable time draft that a bank ...
  3. Investing

    Understanding Financial Instruments

    Financial instrument is a general term used to describe a monetary asset.
  4. Personal Finance

    Retail Banking Vs. Corporate Banking

    Retail banking is the visible face of banking to the general public. Corporate banking, also known as business banking, refers to the aspect of banking that deals with corporate customers.
  5. Insights

    Why Was Everyone at Standing Rock? (FB)

    Earlier this week, Facebook saw hundreds of thousands of check-ins at Standing Rock Indian Reservation in North and South Dakota. Why?
  6. Insights

    The World's Top 10 Banks

    Learn more about the world's largest banks and how more financial power shifts eastward as China is home to four of the world's largest banks.
  7. Financial Advisor

    The Risks of Investing in Art and Collectibles

    Investing in art and collectibles has the potential to lead to a big payday, but it's often a difficult road.
  8. Financial Advisor

    How Are Collectibles Taxed?

    If you plan to sell collectibles, it's imperative that you know the tax implications.
RELATED FAQS
  1. How can I cancel a bank draft that I have purchased?

    Learn about what a bank draft is and how it works, the circumstances under which a bank draft may be cancelled, and what ... Read Answer >>
  2. In which industries is Average Collection Period most important?

    Find out which industries are most concerned with average collection period, and how different types of companies interact ... Read Answer >>
  3. How do I obtain a banker's acceptance?

    Find out how to obtain a banker's acceptance, why you should treat it like a short-term loan and when you would most likely ... Read Answer >>
Trading Center