Bank guarantee and Letter of Credit

[Former Member]

How does one include Bank guarantee in SAP SD credit check.

What is the difference between bank guarantee and letter or credit?

[Former Member]

In our scenario, our customer would have only one bank guarantee at a time from their customer. We created the FD32 record with the value of the BG in this case. That solved the problem. BG was also created as a noted item in SAP.

[Lakshmipathi]

Dear Ravi

To my knowledge, Bank Guarantee is used only in Imports whereas, L/C is used in both (exports and imports) scenarios. In both the cases, bank stand guarantee for payment to seller.

thanks

G. Lakshmipathi

[Former Member]

hi,

Bank gaurantee- It is given by the customer bank to our bank, that it is responsible for the payment.

Letter of credit- It is given by the customer through the customer bank to our bank but it has the credit value and the validity date that customer and client agreed.Based on the LC the client can get loan from his bank.