Bank Guarantee LC

Bank Guarantees and LC are financial instruments often used in inland or international trade when suppliers or vendors do not have established business relationships with their counterparts. The difference between the two instruments is the position of the bank relative to the buyer and seller of goods or services. Therefore, the principal character of an LC is that it is a potential claim against the bank, rather than a bank’s client. An LC substitutes the bank’s credit for its client’s.

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