Anandanath Banerji (Owner) 17 September 2016
I have been hearing about some project funding agencies asking for Standby Letter of Credit (SBLC) or Bank Guarantee (BG) as collateral from project promoter. They say once such collateral reaches the funding agency's bank, the agency would release long-term project finance in tranches.
What can be the catch, or chances of fraud, in these kind of schemes?
Raj Kumar Makkad (Adv P & H High Court Chandigarh) 17 September 2016
The possibilities of fraud cannot be ruled out at any stage. It shall be better to engage a specific lawyr for that purpose so as to minutely go through each and every document.
Raj Kumar Makkad (Adv P & H High Court Chandigarh) 17 September 2016
The possibilities of fraud cannot be ruled out at any stage. It shall be better to engage a specific lawyr for that purpose so as to minutely go through each and every document.
AV Bagur Advocate (Advocate ) 18 September 2016
Without going through the fine print it would not be possible to evaluate the full ramificatons of such offer.
However, a cross/ counter/ back-to-back agreement can help you develop some sembalance of balance should come thing go wrong either in the process level or project level.
I agree with Sh Raj Kumar Makkad you shoudl take the help of experts in this field.
Anandanath Banerji (Owner) 18 September 2016
Thank you both for your comments.
Adding clarification: Is it possible for the funding agency to encash the Bank Guarantee, and not just invoke it?
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