banking services

Bank Guarantee / Standby Letters of Credit

Bank Guarantee / Standby Letters of CreditBy issuing a Guarantee/Standby LC, the bank acts as the guarantor for an obligation owed by the debtor. What these two instruments have in common is the bank’s promise to stand in for the payment of a debt or performance of a service should the debtor fail to fulfill his or her contractual obligations. With this promise, the bank undertakes to pay a maximum specified amount when the conditions of the Guarantee/Standby LC are met.

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