Introduction
The payment guarantee is a written document provided for the contract amount of the deferred payment or forward payment and the interest resulting from the deferred payment.
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 to gain better payment conditions.
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;
6. The guarantee should comply with the State Administration of Foreign Exchange's requirements on registration of deferred payment and complete relevant process.
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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