Significance of Counter Standby in International Trading
A counter standby letter of credit is a kind of standby letter of credit that promises the bank to make the payment to the seller by the buyer. It is a type of financial instrument that is used during international trade transaction. In this article, you will know about counter standby. So let's continue. The beneficiary of the counter standby is generally from another bank that is compelled to delivering such local undertakings assisted by counter standby. Counter standby is used in commercial trading, especially in international transaction, where financial instrument like standby letter of credit is delivered by a foreign bank. The document is composed of integrated notes with a drafting tip and an important explanation. Why Do We Have Standby Letters of Credit? The standby letter of credit originates from the banking department which prevents the credit institution from thinking assurance obligations of the party. To bypass this banking rule, the financial institution has d