A Bank ABC gave an undertaking to the third party, supplier of goods/ services to pay amount of Rs. 2 crore to him on behalf of a businessman Mr. X; provided the terms and conditions of the undertaking are complied with. This service of banks is known as –
A. Issuing letter of Guarantee
B. Issuing letter of Comfort
C. Issuing letter of Credit
D. Issuing letter of Understanding
Answer:C
A Bank ABC gave an undertaking to the third party, supplier of goods/ services to pay amount of Rs. 2 crore to him on behalf of a businessman Mr. X; provided the terms and conditions of the undertaking are complied with. This service of banks is known as –
A. Issuing letter of Guarantee B. Issuing letter of Comfort C. Issuing letter of Credit D. Issuing letter of Understanding