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Answer Posted / krunal joshi
Practically, latter of credit is a document indicating creditworthyness of
importer to make payment to exporter wherein importer's bank gives a
guarantee to exporter that in case of any abnormality, if importer fails to
make payment then bank will do the same.
While in case of BG bank gives a guarantee to their client that in case of
non performance of the job by contractor, client can encash the BG
from bank. By are of 3types. Advance, security & performance.
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