Letter of Credit (L/C) & Bank Guarantees (B/G)

Additional Details

We arrange l/c & bg facilities from various banks and with the minimum securities and cash margins at the lowest possible rates.

Letter of Credit (L/C) & Bank Guarantees (B/G) are different financial facilities that are offered by banking institutions. Here, a Bank Guarantee is a type of banking arrangement where bank substitutes its creditworthiness for that of the customer. It is a contingent obligation meaning “depending on happening of an event, which may or may not occur” with 99% of time its not paid as event does not happen. Always issued on behalf of its customers, the final liability also always falls on the customers.

One common type of BG is performance-related where bank tells beneficiary if customer does meet the defined obligations, the bank will pay like issuing BG to shipping company for release of goods without Bills of Lading or substituting for cash payment. Further, bank guarantees are also issued for financial reasons like MNCs from a particular country wanting to borrow from bank for its subsidiary in another country. In all bank guarantee is banks assurance to guarantee the loan.

Standby Letter of Credit (SBLC) works as non-fund based financial assistance that is provided to customers through leverage of credit line from bankers using Letter of Credit (LC) facility. LC is extended to customers with appropriate cash margin.

HIBL expertise in handling Letter of Credit / Bank Guarantees :
HIBL has with it extensive experience in successfully handling the demands of both LC and BG facilities which can be organized from leading Banks of respective countries. Its team of experienced financial experts also ensures that minimum securities are needed to qualify for facilities of LC or Bank Guarantee.

Some of our services features include :

    Providing BG facilities to sums as desired by customers
    Rates of interest determined as per bank rates of interest
    All offers made valid for one month from date of offer
    No prepayment penalty charges on foreclosure

Some of the standard features of LC and BG include :

    Services primarily used in international trading for large transactions between supplier in one country and customer in another
    BG from lending institutions ensure liabilities of debtors will be met in cases debtor fails to settle debts, bank will cover it
    Letters of credit ensure transaction proceeds as planned, while bank guarantees reduce loss if transaction doesn't go as planned