Introduction to Contingent Liabilities
Guarantee imposes a primary obligation on the issuer to compensate the beneficiary on demand when the applicant / instructing party fails to perform the contract. Standby Letter of Credit (SBLC) is a legal undertaking that Guarantees a bank's commitment of payment to a beneficiary on presentation of the valid claim request.
The three major parties to Guarantee or SBLC are :
- Principal or Applicant or Instructing Party – Requests the issuance of Guarantee or SBLC, that is, the liable party of the guarantee or SBLC undertaking.
- Guarantor – Bank or any other institution or a person who issues the Guarantee or SBLC.
- Beneficiary – Party in whose favour the Guarantee or SBLC is issued.
Guarantees or SBLC product line is a part of the Temenos Transact Corporate Lending suite of products in AA, which provides various features that a financial institution can offer to its customer. It supports an entire range of Guarantees or SBLC business or transaction needs with configurable conditions. Temenos Transact is flexible to allow adding a new Guarantee or SBLC products to it to meet the bank’s future requirements.
Product Configuration
This is covered as part of feature configuration. There is no specific product configuration.
Illustrating Model Parameters
Model Parameters are not applicable for this module.
Illustrating Model Products
Guarantees Product Line provides Financial Guarantee, Financial SBLC, Performance Guarantee, and Performance SBLC functionality for Temenos Transact. This module allows the user to create Financial Guarantee, Financial SBLC, Performance Guarantee, and Performance SBLC by using the AA Framework under Guarantees Product Line.
| S.No. | Product Name | Product Attributes |
|---|---|---|
| 1. | Contingent Liabilities |
|
In this topic