WHAT IS A BANK INSTRUMENT AND HOW IT CAN BE USED

Are you in the business world? The higher are chances that you would have heard about bank instruments. Financial instruments are used by businessmen to grow their businesses.

Especially the Bank Guarantee and Standby Letter of Credit are popularly used among the businessman.

A Standby Letter of Credit will help in facilitating international trading between companies that don’t know each other and have different laws and regulations. This means it will help in smooth trading between companies located in different countries.

Both the buyer and receiver will be certain to receive the goods and payment respectively. But it’s important to understand that the Bank Guarantee or the Standby Letter of Credit doesn’t guarantee that the buyer will be happy with the goods. Also, the standby letter of credit and the bank guarantee are different from each other.

You can either buy or lease BG SBLC based on your need. But before that, it’s important to completely understand the uses of the BG and SBLC.