business.
Businessmen at present think global and aspire to conquer global markets; but to gain confidence of foreign countries and delegates is tough. Here bank guarantee plays a vital part. This is usually seen when a small company is dealing with much larger entity or even a government across border.
Before taking such a huge responsibility, the bank too requires to analyze the financial well being of company to assess the amount of guarantee it can issue. This amount is called a limit.
bank guarantee can be broadly classified into Performance and Financial bank guarantee. Performance bank guarantees are the ones by which the issuing bank, guarantees the ability of the applicant to perform a contract
http://www.hockeyrangersshop.com/KEVIN-KLEIN-JERSEY/ , to the satisfaction of the beneficiary. Financial bank guarantee refers to bank guarantees issued in lieu of earnest moneysecurity deposit specified to be deposited while contractors bid for a tender in favor of Government Departments and others.
Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned. Letters of credit are used primarily in international trade for large transactions between a supplier in one country and a customer in another country.
