http://www.subcontractsindia.com/sblc-.html WHAT IS AN SBLC (STANDBY LETTER OF CREDIT) ? A standby letter of credit (SBLC) is a guarantee of payment issued by a bank on behalf of a client that is used as "payment of last resort" should the client fail to fulfill a contractual commitment with a third party. Standby letters of credit are created as a sign of good faith in business transactions and are proof of a buyer's credit quality and repayment abilities. The bank issuing the SBLC performs brief underwriting duties to ensure the credit quality of the party seeking the letter of credit, then sends notification to the bank of the party requesting the letter of credit (typically a seller or creditor). A standby letter of credit shows a company’s credit quality and ability to repay loans. Although a SBLC is not intended for use, it helps fulfill business obligations in case the business stops operations, cannot pay its vendors or bec...
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