Important Q A on Banking (useful for general awareness paper):
Q:What is Bank Guarantee?
A:Bank Guarantee is an instrument issued by the Bank in which the Bank agrees to stand guarantee against the non-performance of some action/performance of a party. The quantum of guarantee is called the 'guarantee amount'. The guarantee is issued upon receipt of a request from 'applicant' for some purpose/transaction in favour of a 'Beneficiary'. The 'issuing bank' will pay the guarantee amount to the 'beneficiary' of the guarantee upon receipt of the 'claim' from the beneficiary. This results in 'invocation' of the Guarantee.
Q:What is Bank Guarantee?
A:Bank Guarantee is an instrument issued by the Bank in which the Bank agrees to stand guarantee against the non-performance of some action/performance of a party. The quantum of guarantee is called the 'guarantee amount'. The guarantee is issued upon receipt of a request from 'applicant' for some purpose/transaction in favour of a 'Beneficiary'. The 'issuing bank' will pay the guarantee amount to the 'beneficiary' of the guarantee upon receipt of the 'claim' from the beneficiary. This results in 'invocation' of the Guarantee.
Bank issues Guarantee favouring beneficiaries abroad either directly or through our correspondent banks across the continents.
Q:What is A letter of credit?
A: letter of credit is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met. In the event that the buyer is unable to make payment on the purchase, the bank will cover the outstanding amount.
Q:What is NON-FUND BASED LIMIT?
A:There are various types of non-fund based limits
Bank Guarantee
Letters of Credit( Inland or foreign)
Letters of Comfort for availing the Buyers Credit.
Q: What is Buyer's credit ?
A:Buyer's credit is a short term credit available to an importer (buyer) from overseas lenders such as banks and other financial institution for goods they are importing. The overseas banks usually lend the importer (buyer) based on the letter of comfort (a bank guarantee) issued by the importer's bank.
Q:What is Supplier’s Credit?
A:Supplier’s credit is defined as a financial credit facility that is extended to a local Buyer by the Foreign Seller/ BANK/ Financial institutions, preferably of Seller’s Country. The local bank will issue Usance Bills under the LC for the Importer and in return the Foreign bank will discount this LC.
Q:What is A letter of credit?
A: letter of credit is a document from a bank guaranteeing that a seller will receive payment in full as long as certain delivery conditions have been met. In the event that the buyer is unable to make payment on the purchase, the bank will cover the outstanding amount.
Q:What is NON-FUND BASED LIMIT?
A:There are various types of non-fund based limits
Bank Guarantee
Letters of Credit( Inland or foreign)
Letters of Comfort for availing the Buyers Credit.
Q: What is Buyer's credit ?
A:Buyer's credit is a short term credit available to an importer (buyer) from overseas lenders such as banks and other financial institution for goods they are importing. The overseas banks usually lend the importer (buyer) based on the letter of comfort (a bank guarantee) issued by the importer's bank.
Q:What is Supplier’s Credit?
A:Supplier’s credit is defined as a financial credit facility that is extended to a local Buyer by the Foreign Seller/ BANK/ Financial institutions, preferably of Seller’s Country. The local bank will issue Usance Bills under the LC for the Importer and in return the Foreign bank will discount this LC.
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