Supposing that I/my company have a sitting fund in my bank account and I approached my bank to issue me an irrevocable letter of credit in favor of an associate company (the associate company is about to render me a service but I don't trust to release money upfront to him until after he completed the work), will my bank has any right to object my request (I know that letter of credit is not issued for free, so I will be gladly ready to pay the price for it's cost) or question my decision?

Meanwhile, I hope I am correct on my thought that in the event that my bank accedes to my request and issued me the irrevocable letter of credit, they would not allow me to withdraw money above the sum stated on the issued letter of credit until after my associate collect his money upon fulfilling his obligation.

L.C is not appropriate here. The contractor should be the party to approach the Bank for APG, Custom Bond, etc. This will give u, d contract employer d comfort to make advance payment to the contractor, that contractor will perform to expectations. U need to know that payment is made in tranches base on percentage of work completion and that the Bank will perform intermediation role in this arrangement for a fee, usually 1% of contract value (It is negotiable) to be borne by the contractor. U are not d party to approach the bank for such because u are the contract employer.

Note that Letter of Credit (L.C) is usually for international trade between importer and exporter...

olasquare22:
L.C is not appropriate here. The contractor should be the party to approach the Bank for APG, Custom Bond, etc. This will give u, d contract employer d comfort to make advance payment to the contractor, that contractor will perform to expectations. U need to know that payment is made in tranches base on percentage of work completion and that the Bank will perform intermediation role in this arrangement for a fee, usually 1% of contract value (It is negotiable) to be borne by the contractor. U are not d party to approach the bank for such because u are the contract employer.

Note that Letter of Credit (L.C) is usually for international trade between importer and exporter...

Thank you very much. Meanwhile, may I know, in a country like ours where level of trust is so minimal, assuming I still want to carry on with my wish to be the one to issue a guaranty instrument to my associate without need of giving him money upfront to execute a job for me, what bank instrument can best suit my purpose in place of L.C citing the fact that L.C is majorly used in international trade. Thank you in advance for your professional input and time.

Cultured:



Thank you very much. Meanwhile, may I know, in a country like ours where level of trust is so minimal, assuming I still want to carry on with my wish to be the one to issue a guaranty instrument to my associate without need of giving him money upfront to execute a job for me, what bank instrument can best suit my purpose in place of L.C citing the fact that L.C is majorly used in international trade. Thank you in advance for your professional input and time.

Advance Payment Guaranty (APG) is d appropriate instrument. This is issued by the bank. It is a requisite instrument to be provided by the contractor. Pls do note that the bank that issues this guaranty receives the payment from contract employer while it in turn releases to the contractor in tranches. I will reiterate that the contractor is in position to get APG for u, authenticity of which could be confirmed.

olasquare22:


Advance Payment Guaranty (APG) is d appropriate instrument. This is issued by the bank. It is a requisite instrument to be provided by the contractor. Pls do note that the bank that issues this guaranty receives the payment from contract employer while it in turn releases to the contractor in tranches. I will reiterate that the contractor is in position to get APG for u, authenticity of which could be confirmed.

Thank you once again. I really understand all you said about APG. However, I am looking toward a "postpaid" service plan and a guaranty instrument that can suit such purpose. In a postpaid service plan (a situation whereby the contractor is fully ready to use his own money to finance a project until completion), it's expected of a customer (me) to be the one to present the contractor a guaranty instrument to boost his confidence.

There is no standard product for this. It is however do-able. It can be a modified Bank Guaranty (BG). But u still must have a balance that could cover the contact value with bank if it would be undertaken.

Standard Chartered Bank to Sack 1,000 Senior Staff

Standard Chartered Bank, after persistent denials, has confirmed imminent sack of 1,000 senior staff to reduce cost, according to an internal memo sent to staff.

The move was confirmed by Bill Winters, the CEO of Standard Chartered.

The Internal Memo read in part: “that there would be further personnel changes to come. We have already acted to reduce management layers, and a result will have up to 25% fewer senior staff.”

The decision is expected to affect about 4,000 bankers in the grades selected.

The bank has 88,000 employees in total, growing rapidly from about 44,000 in 2005.

http://www.businessjournalng.com/standard-chartered-bank-to-sack-1000-senior-staff/

olasquare22:
There is no standard product for this. It is however do-able. It can be a modified Bank Guaranty (BG). But u still must have a balance that could cover the contact value with bank if it would be undertaken.

Kudos! Now, I am satisfied with your answer. Actually, my company will soon launch a product on the Nigerian market and I always like to do things outside the conventional norms, thus the reason for my inquisition. It will not be a bad thing to have you as an economic consultant. Accept my humble regards.