CCI Online Learning
What do you want to learn today?
     
CIBIL

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Letter of credit and bank guarantee


Hemanshu Bakshi   06 December 2018

Hemanshu Bakshi

 3 likes  77 points

| My Other Post

What is the difference between the Letter of Credit and Bank Guarantee?

 

Step by Step procedure to get the Letter of Credit and Bank Guarantee?

1 Like
avater

Ajit Hegde (CA - Final)     07 December 2018

Ajit Hegde
CA - Final 
 91 likes  1357 points

View Profile | My Other Post

A Letter of credit (LC) in simple terms, is a guarantee given by the buyer's bank to the supplier or his bank situated in the same country or a foreign country. Usually LC limit is part of one's CC limit. For eg. if you have a CC limit of 10 lakhs with your bank that may include LC limit of say 2 lakhs. Your bank will issue LC for maximum of 2 lakhs. It is nothing but a overdraft facility extended by the bank.

Whereas Bank guarantee (BG) involves actaul deposit of money or given on the basis of a FD. BG can be understood as a deposit, but the guarantee of which is taken by the bank after considering deposited monetary security by you. BG is generally given for tender purposes or any govt benefits as a security deposit.

1 Like
avater

Hemanshu Bakshi   07 December 2018

Hemanshu Bakshi

 3 likes  77 points

View Profile | My Other Post

Thank you Ajit Hegde Sir


Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register  


Related Threads


Loading

Popular Discussion


view more »



Trending Tags
gst council meeting
epfo
law
icsi
Service Tax
ca exams may 2020
accounts
tcs
gst return
income tax
tin nsdl
Info Technology
Excise
gst portal
epf
Professional Resource
exams
unified portal
traces
ca students
newgstreturn
taxpayers
gstr 9
students
Union Budget
itr