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Bank Guarantee Discounting refers to the process where a financial institution provides a loan or advance to a borrower based on a bank guarantee issued to them. Essentially, the bank guarantees that it will cover the borrower's obligations if they default, allowing the borrower to secure funding more easily. This mechanism is often used in trade finance and project financing to enhance liquidity and reduce risk for lenders. The discounted amount typically reflects the present value of the future cash flows associated with the guarantee.

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1mo ago

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What is the meaning of cheque discounting?

Cheque Discounting is providing a post dated cheque to a bank by its customer which amounts to the short term loan taken from the bank and the interest charged by the bank.


What happened to Guarantee Bank and Trust Co in Dallas Texas?

Nothing. I believe it's Guaranty Bank not "Guarantee Bank."


What is discounting bill exchange?

It means when holder of a bill needs money he can take the bill to bank where the bank will discount it and chargesome interest on that


What is the difference between a corporate guarantee and a bank guarantee?

A Bank guarantee is given by the bank on behalf of it's customer (applicant) to the beneficiary of the bank, that in case of non happening of the particular event which is being covered by that particular guarantee, the bank ( guarantor) will pay the beneficiary an amount, which is mentioned in the guarantee, provided the beneficiary submit the claim under the guarantee in the agreed format and within agreed time. The claim ( compensation) under the bank guarantee will be financial in nature. A corporate guarantee is a guarantee given by the corporate to cover their own exposure or exposure of some other related entity, to the bank. It will also be financial in nature and banks derive an additional comfort from such guarantees when they do their lending to particular borrower.


Who are the parties involved in bank guarantee?

Guarantor– The Bank who gives the guaranteeApplicant– The Company on whose behalf the guarantee is givenBeneficiary– The Company on whose favor guarantee is given

Related Questions

Whats the formula for Contingent liabilities as a percent of Net Assets?

contingent liability =Bank Guarantee+other bank Guarantee+bill discounting+Letter of credit


What is the meaning of cheque discounting?

Cheque Discounting is providing a post dated cheque to a bank by its customer which amounts to the short term loan taken from the bank and the interest charged by the bank.


What is the amount received by the endorser after discounting a note receivable at the bank is called the?

The amount received by the endorser after discounting a note receivable at the bank is called the "proceeds" from the discounting process. This represents the cash amount the endorser receives immediately, minus any discount fees or interest charged by the bank for the early payment of the note.


What is the difference between Bank guarantee and Counter guarantee?

A bank guarantee is a guarantee issued by the bank to the beneficiary that the bank will make payment in case the bank's customer does not make payment to the beneficiary or in case of non-performance of an obligation or contract. A counter guarantee is a guarantee taken by the bank from the bank's customer which ensures that the bank's customer is liable for any expenses including costs of attorney, any interest on delayed payment, taxes and other levies in case of invocation of the bank guarantee. It is a sort of security for the bank. It is always a good practice for a bank to take counter guarantee from its customer.


What happened to Guarantee Bank and Trust Co in Dallas Texas?

Nothing. I believe it's Guaranty Bank not "Guarantee Bank."


How to you calculate bank guarantee amount?

To calculate the bank guarantee amount the amount of deposit in the bank account is usually considered.


What is Discounting bill of exchange?

It means when holder of a bill needs money he can take the bill to bank where the bank will discount it and chargesome interest on that


What is discounting bill exchange?

It means when holder of a bill needs money he can take the bill to bank where the bank will discount it and chargesome interest on that


What is the difference between a corporate guarantee and a bank guarantee?

A Bank guarantee is given by the bank on behalf of it's customer (applicant) to the beneficiary of the bank, that in case of non happening of the particular event which is being covered by that particular guarantee, the bank ( guarantor) will pay the beneficiary an amount, which is mentioned in the guarantee, provided the beneficiary submit the claim under the guarantee in the agreed format and within agreed time. The claim ( compensation) under the bank guarantee will be financial in nature. A corporate guarantee is a guarantee given by the corporate to cover their own exposure or exposure of some other related entity, to the bank. It will also be financial in nature and banks derive an additional comfort from such guarantees when they do their lending to particular borrower.


Can a Bank Guarantee be issued at the request of sub-contractor on behalf of contractor?

Yes, a bank guarantee can be issued at the request of anyone. It is their decision whether they require a guarantee or not.


Who are the parties involved in bank guarantee?

Guarantor– The Bank who gives the guaranteeApplicant– The Company on whose behalf the guarantee is givenBeneficiary– The Company on whose favor guarantee is given


What is a bank guarantee with cash margin?

A bank guarantee is given to the customer to perform specific actions of a contract. When there is a cash margin involved, the money will be returned to the customer once the original bank guarantee is completed.