Hii Guys , I want to know What is Stand-by Letter of Credit of Bank Of America , Here Would you please Provide me ?

A Commercial Letter of Credit is taken as Guarantee to be used in payment of goods and Services.

The Standby Letter of Credit issued is taken as guarantee that the applicant, the customer of issuing bank will execute responsibilities under an agreement.

If an applicant fails to meet the promises made, the beneficiary draws on standby.

According to the Controller of Currency, Standbys defined as, ‘any letter of credit or a similar document issued which mentions responsibilities to the beneficiary on the side of issuer.

The Standby Letter of Credit mentions Details :

1. To pay back the money borrowed or advanced to or for the account of the account party.

2. To pay on account of an indebtedness undertaken by the account party.

3. To pay in case of default by the account party in meeting of any promises made.

A stand-by letter of credit can help facilitate a transaction by providing comfort to the beneficiary.

A Solid Agreement
Collateral
Popular in America
Typical Uses

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