Introduction
A written document to guarantee the payment of goods under the contract or the progress payment of a contracted work provided for the seller or the contractor upon the application of the buyer or the owner.
Features
1. Reduce capital occupation due to cash margin payment;
2. Reasonably regulate the behavior of the goods seller and the project contractor to protect the interests of the buyer and the owner;
3. Improve the commercial credit of enterprises.
Application Qualifications
1. The applicant shall have the qualification to engage in underlying transactions;
2. The applicant shall maintain good credit standing without any bad record;
3. The applicant shall have sufficient credit line or be able to pay sufficient margin necessary for issuing the letter of guarantee;
4. The applicant shall possess real relationship of transactions that meets Bank of China's requirements on business compliance;
5. The applicant shall provide complete and valid business information.
Process
1. The customer submits application for letter of guarantee and relevant documents;
2. Bank of China reviews the documents and issues the letter of guarantee;
3. Bank of China charges guarantee fees;
4. Bank of China amends the letter of guarantee;
5. Bank of China makes compensation against the letter of guarantee or cancels the letter of guarantee.
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