Bank Instruments and Its

Various Types

•Letters of credit or the Standby Letter of Credit (SBLC)

is sometimes referred to as transferrable or negotiable.

It can help you both nationally and internationally in

terms of business.

•The bank instruments strengthen your borrowing

power. You get world acceptance of the collateral if you

obtain an instrument issued by top banks along with

lots of greater flexibility because of securing proper

funding for any kind of international or cross border

business activities.

• There are a lot of benefits of banking instruments and

these are crucially important.

The importance of banking

instruments

•You can either import or export

•It can be considered as the collateral for

project finance

•You can purchase bank instruments or Bank

Debenture

•You can use it as the other Credit

Enhancement

The types of instruments:•Standby Letter of Credit or SBLC

•Letter of Credit or LOC

•Bank Guarantee or BG

•Certificate of Deposit or CD

•SWIFT MT799

•SWIFT MT760

The terms of the instruments:•Minimum $1M account size up to $1B

•Month to month account service or 12 month

extension

However, the instruments do follow a certain

rules like unless there is a non-payment of full

use fees, there is no other way where you can

terminate the instrument in the middle of the

contract.

As a borrower, you cannot withdraw, cancel or

terminate the instrument.

Advantages of Performance bonds for

Owners

•Owners do not need to incur additional costs.

•The owner of a project is assured of the

completion of the project.

•Performance Bond allows owners to retain

their working capital.