Guarantee services are an important part of the contingent operations of the commercial bank. In this respect, the bank undertakes the guarantee obligation that might increase its own assets and liabilities.

Services available with us including Letter of Guarantee (L/G) , standby Letter of Credit (L/C) , Lending Commitment and Lending Intent .

Letter of Guarantee

Service Description

A written undertaking issued by the guarantor (the bank) at the request of the applicant (one party of an commercial deal, or one part of a contractual or economic relationship) to the beneficiary (the other part), guaranteeing the fulfillment of certain economic obligations under the deal or the contract signed between the applicant and the beneficiary. The Letter must clearly specify the amount and the valid period of the guarantee.

L/Gs available with the bank are lending L/G, leasing L/G, overdrawing L/G, bid bond, advance payment L/G, construction performance L/G, repairing L/G, maritime L/G, duty confirmation L/G, compensation trade L/G, shipping L/G, retention money L/G, stock issuance L/G, etc..

Features

Guaranteed by the bank, widely accepted.

Business Handling

Documents required to apply for L/G with the bank include: sealed Letter of Application, background materials, recent financial statements and other certificates, as well as guarantees recognized by the bank.

Standby L/C

Service Description

A written payment guarantee issued by the bank at the request of the applicant to the beneficiary, guaranteeing that the applicant will perform obligations stipulated in the commercial contract and paying on behalf of the applicant, when default, to the beneficiary a specified amount of money against the documents and bills presented by the beneficiary.

Features

A separate document from the basic contract, the same force as the non-subordinate guarantee contract.

Business Handling

Documents required to apply for L/G with the bank include: sealed Letter of Application, background materials, recent financial statements and other certificates, as well as guarantees accepted by the bank.

Lending Commitment and Lending Intent

Service Description

Lending commitment is an undertaking made by the bank to the client that the bank will tender the latter a loan according to the negotiated terms in a certain future period. That is, the bank performs a further evaluation and demonstration on the project that passes the feasibility study in response to the client's application, and promises, on conditions that the project is in accordance with the bank's loan orientation and meets the bank's loan requirements, to offer a loan of specified amount and specified loan period to the applicant within a specified valid period.

Lending intent is the willingness that the bank would like to grant a loan to the client. It is usually given by the bank at the stage of project listing based on a preliminary evaluation and demonstration on the project.

Features

Both of them are some kind of promise that the bank will offer credit support to the client in the future, however, they are different in many aspects:

The extent of commitment : The latter is just a commitment that further preparations and negotiations of the loan can be arranged, while the former has already agreed on major conditions and major articles of the loan.

The issuing time : Large project is required the latter at the stage of the approval of the advising letter of the project, while the former is required at the stage of the approval of the feasibility study report.

The legal liability : The former has legal binding force, while the latter does not.

The content : the former consists of the commitment amount, valid period, department authorized for approval of the loan, loan requirements and charges, while the latter doesn't contains the loan amount and valid period.

The charge :  the former is fee-based in general, while the latter isn't.

Business Handling

All legal persons of corporations and public institutions with full civil capacity and other economic organizations are eligible to apply for both of the lending commitment and lending intent. The following documents are required for the application:

•  Letter of Application;

•  Business license of legal person;

•  Photocopy of the legal representative's ID card;

•  Audited accounting statement of the last year and the latest accounting statement;

•  The certificate of loan;

•  Advising letter of the project in question from the competent authority or feasibility study report;

•  Guarantee documents, and

•  Other materials required by the bank.