Bank Guarantee is a guarantee in the form of letter issued by a bank which results in an obligation to pay against the party that receive the guarantee (beneficiary), if the guarantor breach the contract (default).
The types and functions of the Bank Guarantee are:
A guarantee issued by the bank that result in a bank's obligation to pay the guaranteed recipient (beneficiary) for any default/breach of contract, or the obligation to pay from the guaranteed party (account party/applicant).
The Demand Guarantee refers to the Uniform Rules for Demand Guarantee (URDG) 758.
Standby Letter of Credit (SBLC) is a guarantee issued by the bank, which results in the bank's obligation to pay to the guaranteed recipient party (beneficiary) for any default/breach of contract or payment obligation from the guaranteed party (account party/applicant).
The types of SBLC are:
SBLC refers to International Standby Practice (ISP) or Uniform Custom and Practice for Documentary Credit (UCP) 600.
A re-guarantee that is issued if the Guarantor Bank issuing the guarantee instrument (Bank Guarantee or Standby L/C) cannot be accepted by the guaranteed party (beneficiary), so that the guaranteed party requests the guarantee instrument to be re-guaranteed with another instrument issued by other guarantor banks (generally those with international reputation).