The issuance of the letter of guarantee does not cost the bank usually only administrative expenses, because the bank often does not paythe mortgage amount to the beneficiary and, if the bank that the payment of the value of a number of guarantees it will meet in full of customers, does not bear a great loss.
Also that the bank when he issued the letter of guarantee calls for the client typically cover monetary different rate from the value of securityaccording to the degree of trust and the relationship between the parties, and filed this cover cash at the bank, which provides his owncash deposits and liquid can be used and invested either on the basis of speculation deserves a share of the profit agreed it, or fullyinvested as risking money guaranteed to have such a loan.
Another advantage achieved by doing the bank to issue letters of guarantee, it is considered a banking service with good effect, in turn, attract more customers, making the bank to achieve greater returns in the areas of banking other variety.
التسميات
Letters of Guarantee