Letters of Guarantee
Letter of Guarantee
A Letter of Guarantee is an irrevocable undertaking by a Bank to pay a specified amount of money to a beneficiary, if for any reason the applicant fails to comply with certain obligations or conditions under the Agreement.
Type of Facility- Financial/Performance/Bid Bond/Advance Payment
Features and Benefits
- Governed under URDG 758 or Law of a Country
- Irrevocable- the terms and conditions cannot be changed without the agreement of all the parties (Applicant, Beneficiary and Issuing Bank)
- Payable on Demand
- Transferrable and Assignable (Discretion of issuing Bank)
- Demonstration of Solvency of the Applicant
- No Requirement to lodge cash with Beneficiary
- Comfort of holding your cash in deposit and earning interest.
- Cash/Security available for business expansion
- Opportunity to negotiate terms as payment against claim is assured
- Cost saving compared to Bank Loans
- Protection from financial loss
- Loss Protection if transaction/s not as per plan
- Surety of a Bank- Assured Payment- Reduction in Risk of Non-payment
- No examination whether the respective contractual obligations of the Seller or the Buyer have or have not been performed.
- Correct Claims are not contestable
- Assured payment on non-compliance of terms by Applicant
All forms of legal entities engaged in trading, manufacturing or other productive economic activities with sanctioned credit limits. Please contact Bank for credit facilities.
- Trade License
- Copy of relevant Contract/Agreement
- Draft format for Guarantee, if any.
- Modest collateral requirements.
Terms & Conditions Apply
Letters of Credit
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