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Dear All

I would like to understand the following scenarios in LC.

1. When will a corporate request an issue of guarantee?
2. When will a corporate request an issue of standby LC?

3. What is third bank advice and transfer advice?

Any comment would be appreciated.

Thanks
John

dear john,

there is no definite answers to your question. the general answer is when the applicant and beneficary wants to enter a long term business relationship and at the same time wants banking cost, they may prefer to issue a BG or Stand by. there is hardly any differences between a bank guarantee and a standby letter of credit. the differences in mainly in understanding and practice. in my limited experience, i have seen most of the bank guarantee subject to ISP98 instead of URDG.

not sure about the third question. are you talking about transferable LC?

MT-710 used in SWIFT. When LC issuing bank do not have key/correspondence arrangement with Advicing bank,they use services of other correspondence called Third bank.

Thank you all for your replies

John