Principles of Lending Different Types of Borrowers and Types of Credit Facilities
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
One-liners from this chapter
Free sample — 8 of 64 rapid-fire Q&A cards.
Creditor — Role / In a BG?
Role: The one to whom the obligation is owed; In a BG: Beneficiary (in whose favour BG is issued)
Principal Debtor — Role / In a BG?
Role: The one whose obligation it is; In a BG: Applicant (bank's customer)
Surety — Role / In a BG?
Role: The one who undertakes the obligation conditionally; In a BG: Bank (issuing the BG)
Sight LC?
Payment on presentation of compliant documents
Usance LC?
Payment at a future date (e.g., 30/60/90/180 days after sight/BL date)
Revolving LC?
Amount automatically reinstates after each utilisation, up to a ceiling
Back-to-Back LC?
A second LC opened by an intermediary in favour of original supplier, backed by the master LC
Transferable LC?
Beneficiary can transfer rights to a second beneficiary
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