Circular Notes Law and Legal Definition

A circular note is a written request by a bank to its foreign correspondents to pay a specified sum of money to a named person. When presenting the note for payment, the person to be paid must produce a letter (containing the signature of an official of the bank and the person named) called a letter of indication, which is usually referred to in the circular note. Circular notes are generally issued against a payment of cash to the amount of the notes, but the notes need not necessarily be cashed, but may be returned to the banker in exchange for the amount for which they were originally issued.