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Reply from Roy B on Aug 14 at 12:20 PM This is a question of the client's policy, not a question of what is right or wrong. Your client wants the bank guarantee to be considered as additional to the credit limit. That means they have set credit limits on the basis of what they think is safe with no other security. Then they receive security in the form of a bank guarantee over and above and they grant in effect an extension of credit because of that fact. What is wrong with that? I would not have a problem with it. It should not be considered as a liability but as an asset.
Regards,
Roy B.
| | | ---------------Original Message---------------
From: LiSa Lim
Sent: Tuesday, August 14, 2012 11:08 AM
Subject: Bank Guarantee Vs Credit Limit
Hi experts,
Need some advice. My client has a request to make bank guarantee (bg) included in credit consideration even though it is a noted item.. They would like the bg to consumed first before consuming the credit limit... Is this requirement valid? Is the customer bg suppose to reduce the credit consumption or increase?
For example customer A has credit limit 500,000. A bg of 250,000 was received and posted as a noted item.. This item will appear in the special liabilities in credit master sheet. And will consume my credit by 250,000.. My credit exposure is now 50%.. This was my test result which does not fulfill the business requirement...
I have yet to test with downpayment/advance payment to see if the result will b the same..
Anyone encounter such requirement and how do u handle from system? |
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