Bank Guarantee Charges Calculator
shared by financeseva12 on Jul 20
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Bank Guarantee Charges Calculator
To understand bank guarantees, one needs to know the basic definition of a guarantee which acts as a security. A bank guarantee is when a bank offers surety and guara...
ntees for different business obligations on behalf of their customers within certain regulations.
The lending institutions provide a bank guarantee charges calculator which acts as a promises to cover the loss of the customer if he/she defaults on a loan. It is an assurance to a beneficiary that the financial institution will uphold the contract between the customer and third party if the customer is unable to do so.
Bank Guarantee Charges
Apart from this, the bank may also charge the application processing fee, documentation fee, and handling fee. In some cases, security is required by the bank from its applicant, which is generally 100% of the BG value. In certain cases, collateral security or cash margin may also be accepted by the issuing bank.
Usually, BG charges are based on the risk assumed by the bank in each transaction. For instance, a financial bank guarantee is considered to assume more riskier than a performance bank guarantee. Therefore, the charges for financial BG will be higher than the fee charged for performance BG. Based on the type of the BG, fees are generally charged on a quarterly basis on the BG value of 0.75% or 0.50% during the BG validity period.
Bank Guarantee Charges Calculator is a simplified tool used for calculating an indicative amount of the bank guarantee.
Source
https://fina...-guaranteeCategory
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