Bank Guarantee & Letter Of Credit

This query is : Resolved

Sachin Sabale (Querist)
Follow

17 February 2010 Dear Mates

Can u explain What is bank Guarantee & Letter of Credit? what is the difference in both? where can i get detail information of this?

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
Follow

17 February 2010 mr sachin sabLE,

WILL U PROVIDE YOUR EMAIL

ramesh.arti@yahoo.co.in

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
Follow

17 February 2010 A bank guarantee and a letter of credit are similar in many ways but they're two different things. Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned.

A letter of credit is an obligation taken on by a bank to make a payment once certain criteria are met. Once these terms are completed and confirmed, the bank will transfer the funds. This ensures the payment will be made as long as the services are performed.

A bank guarantee, like a line of credit, guarantees a sum of money to a beneficiary. Unlike a line of credit, the sum is only paid if the opposing party does not fulfill the stipulated obligations under the contract. This can be used to essentially insure a buyer or seller from loss or damage due to nonperformance by the other party in a contract.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Join the CA Students WhatsApp Community for ICAI Updates, Trending Courses & Notes!

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

kavita goel

venkanna setty

Sivanath VV

Shivchandra Jakhotia

jaspreet sidana

Subscribe Now

Bank Guarantee & Letter Of Credit

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Senior Executive

Manager- Finance and Compliance

GST CONSULTANT

GST CONSULTANCY

Accountant

CA Final

Article Assistant

Associate CA