- •Banking 2 documentary collection. Some aspects of commercial banking
- •1.1. The collection order of a bank
- •1.2 Documents are presented for collection
- •1.3 A collection order is not acknowledged
- •1.4 Returning the accepted drafts
- •1.5 Payment guarantee granted by the bank
- •2 Letter of guarantee
- •2.1 Correspondance on letter of guarantee
- •2.2 Payment guarantee granted by the bank
- •2.3 Performance guarantee granted by the bank
- •Part II
- •3 Some aspects of commercial banking
- •3.1 Opening a current account
- •3.2 Problems on standing order
- •3.3 Request for an overdraft
- •3.4 Advice of granting an overdraft
- •Vocabulary
- •Part II
- •Part II
1.5 Payment guarantee granted by the bank
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UNION BANK OF SWITZERLAND Haldenstrasse 118 3000 Bern 22 Switzerland
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Our ref. Your ref.
15th June 20__ SCIPELLI SPA, Milano Cc: Vnesheconombank, Moscow Banca Commerciale Italiana, Milano
Dear Sirs,
In accordance with Contract No. 33/A/51 of 23 May 20__signed between the Seller – SCIPELLY SPA, Milano and the Buyer – Novoimport, Moscow, the Buyer undertakes to pay to the Seller for the fabric sold in U.S. Dollars the sum $ 450,000 representing 90 per cent of the contract value against drafts plus three percent annual interest for the granting of deferred payment.
We hereby unconditionally guarantee fulfillment by the Buyer of his obligations with regard to the payment of the sums against the Seller’s drafts on the dates stated in Article 3 of the present contract.
If the Buyer for some reason fails to effect payment in whole or in part or does not accept the drafts on the dates stipulated by Article 3 of the present Contract we shall pay to Banca Commerciale Italiana, Milano in favour of the Seller the amounts due to him under the present Contract on the Seller’s first demand. Cont. |
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The present Letter of Guarantee will be valid till the date of full payment to the Seller of the sums against the above mentioned drafts.
Yours very truly, S..Schiller S.Schiller Union Bank of Switzerland
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2 Letter of guarantee
There are two types of bank guarantees: payment guarantees and performance (contractual) guarantees. Payment guarantee secures payment under a contract (Point 1.5 is an example of a payment guarantee). Performance guarantee secures proper fulfilment of contractual obligations, delivery of goods, return of an advance payment in case of any infringement of the contract, participation in tenders etc.
2.1 Correspondance on letter of guarantee
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Putney & Raven Merchants Ltd. 123-5 Lowland Street London EC1 2RH | ||
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Our ref. Your ref.
14 May 20__ Stroganov & Co. RF, Moscow, Rusakovskaya st., 6
Dear Sir,
Much to our regret we have to inform you that so far we have not received a bank guarantee from you.
In view of the above we would like to remind you of your letter of 18 April, this year, in which you asked us to change the method of payment by L/C as inconvenient owing to the difficulties and extra expenses connected with its opening.
Meeting you halfway we made you a concession and offered payment for collection terms. You accepted the proposed method of payment and undertook to submit a first-rate bank guarantee for 100% of the contract value within three weeks.
However, as we are still without your bank guarantee we have had to suspend shipment of the goods. Cost of storage will be charged to your account.
We urge you to inform us immediately when the bank guarantee will be submitted and ask you to confirm your consent to cover the expenses for the storage of the goods kept at the port of loading.
Yours faithfully, D.Raven D.Raven Director |
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