A letter of guarantee is a surety bond, addressed to a government agency or organization, or other natural or legal entities, in which the bank pledges to pay a stipulated amount under stipulated terms and conditions in the event that a contractor fails to fulfill some specified contractual obligation or duty.
Letters of reference are generally issued for credible customers who engage in construction and contracting work.
A letter of credit is a bank obligation which states that if documents showing that goods have been loaded or services have been performed are presented within a specified period of time, a designated sum of money will be paid to the seller of the good or service. In short, a letter of credit is a conditional bank guarantee.
External guarantee loan is a letter of guarantee issued to a principal in a foreign country guaranteeing that international trade commitments will be fulfilled by the bank’s customer. If the contractual obligation is not fulfilled in due time and as specified, the bank pays the principal the agreed amount of money. The bank collects commissions in advance or at the end of 3 month terms for this service.
It’s the guarantee addressed to our bank, issued on international beneficiary’s demand covering the beneficiary bank’s guarantee for the credits extended or guarantee letters issued to our customers.