State the difference between Bank Guarantee and letter of credit.

1.	State the difference between Bank Guarantee and letter of credit.
Answer» Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned. A letter of credit is an obligation taken on by a bank to make a payment once certain criteria are met.. A bank guarantee, like a line of credit, guarantees a sum of money to a beneficiary.

Answer»

Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned.

A letter of credit is an obligation taken on by a bank to make a payment once certain criteria are met.. A bank guarantee, like a line of credit, guarantees a sum of money to a beneficiary.

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State the difference between Bank Guarantee and letter of credit.

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