2006-12-26 22:58:04 · 13 answers · asked by k_cweet 1 in Business & Finance ➔ Credit
Bank Guarantees are financial instruments through which a Bank guarantees payment/ liability on behalf of individuals and /or entities to a third party. You can get a Bank Guarantee from a Bank.
2006-12-26 23:14:02 · answer #1 · answered by jnanp2001 2 · 0⤊ 1⤋
What Is Bank Guarantee
2016-09-29 09:57:32 · answer #2 · answered by garbaez 4 · 0⤊ 0⤋
Dear friend,
Firstly about the meaning of a bank guarantee, The document, Bank Guarantee, referred to as BG , is an assurance by the banker , TO PAY a certain specified amount , upon happening/not happening of an contigent event (usually the failure of the principal debtor to repay the debt to the creditor on due date). The financial guarntees are therefore issued by the bankers of the borrowers, in favour of the creditors guaranteeing the due repayment of the debt. For invocation of the guarantee the credior has to declare that the principal borrower has failed in his committments. This claims against the bank has to be made wtithin the validity of the guarantee.
Banks charge commission (fee) to their customers for issuing such guarantee. Usually US banks do not issue such guarantees but instead they issue Stand By Letters of Credits.
About the question of how to get a bank guarantee. Whether you like some bank assure you some debt of your debtors or whether you wish your bank to give BG in favour of your suppliers/creditors assuring payment on your behalf? In the first case you have to inform your debtors that you need a bank guarantee for ,say 50% ,of the transaction. The buyers/debtors will then issue the guarantee and that will be routed thru your bankers. If , on the other hand your creditors are requiring guarantee, then you will have to approach your bankers with a request to issue the guarantee on your behalf. The bank will assess your credit worthiness and issue the guarantee.
See to it that the amount and validity of the guarantee is not more than actually required, since the fee is based on the amount and duration of the guarantee.
2006-12-27 04:09:18 · answer #3 · answered by concerned citizen 2 · 2⤊ 0⤋
Guarantee is required either to secure a debt or a performance. For example if you have borrowed money from some one then a bank can guarantee the lender for repayment of the debt. in the second case if you have taken up some construction work and supply of machinery warranting a good performance or completion within a time limit the bank may give a guarantee for due performance to the party for whom you have undertaken the job. Of course the bank will study about your credibility and try to secure themselves with some securities or margin money from you.
2006-12-28 01:24:40 · answer #4 · answered by KNOWALL 2 · 0⤊ 0⤋
Bank Guarantee is an instrument of guarantee made by the Bank on behalf of its customer as a guarantor to the supplier or merchant for the payment of its debt in case of failure to honour a contract of purchase. You have to apply to your Banker for Bank guarantee and follow prescribed procedure. The Bank will levy necessary charges to you towards issuing Bank guarantee.
2006-12-26 23:27:22 · answer #5 · answered by Brahmanyan 5 · 0⤊ 0⤋
A bank guarantee and a letter of credit are similar in many ways but they're two different things. The main difference between the two credit security instruments is the position of the bank relative to the buyer and seller of a good, service or basket of goods or services in the event of the buyer's default of payment.
2006-12-27 00:18:38 · answer #6 · answered by irene z 1 · 0⤊ 0⤋
This Site Might Help You.
RE:
what is a bank guarantee mean ? how can one get bank guarantee ?
2015-08-10 04:56:42 · answer #7 · answered by Anonymous · 0⤊ 0⤋
Dear Sir/Ma,
We have direct providers of Fresh Cut BG, SBLC and MTN which are specifically for lease. Our bank instrument can be engaged in PPP Trading, Discounting, Signature Project(s) such as Aviation, Agriculture, Petroleum, Telecommunication, Construction of Dams, Bridges, Real Estate and all kind of projects. We do not have any broker chain in our offer neither do we get involved in chauffer driven offers. We deliver with time and precision as set forth in our agreement. Our terms and Conditions are reasonable, below is our instrument description.
DESCRIPTION OF INSTRUMENTS:
1. Instrument: Bank Guarantee (BG/SBLC)
2. Total Face Value: Min of 1M Euro/USD (One Million Euro/USD) to Max of 5B Euro/USD (Five Billion Euro/USD).
3. Issuing Bank: HSBC, London or Deutsche Bank Frankfurt or any Top 25 WEB
4. Age: One Year, One Day
5. Leasing Price: 5.0% of Face Value plus (0.5+X)% commission fees to brokers.
6. Delivery: Bank to Bank SWIFT.
7. Payment: MT-103.
8. Hard Copy: Bonded Courier within 7 banking days.
All relevant business information will be provided upon request.
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2013-11-12 20:13:44 · answer #8 · answered by Tim 1 · 1⤊ 0⤋
What is the quantum of BG (Bank Guarentee) charges a bank will levy. If I ask for a BG against say 15 K and I need BG of equivalent amount, what would be the charg from say State Bank of India?
2013-10-28 01:05:40 · answer #9 · answered by Mahesh 1 · 0⤊ 0⤋
a bank guarantee is either in the form of a cashiers check or a guaranteed letter of credit for a certain amount of money/the letter says you are good for the cash/amount needed. have to get with a bank to set it up. cashiers check says they have the money on hand and thats why the check was issued.
2016-03-12 21:02:13 · answer #10 · answered by Anonymous · 0⤊ 0⤋