Bank assurance refers to a bank acting as a guarantor for commercial and non-commercial transactions, providing an important function in letter of credit transactions and export financing. Banks must verify that clients are account holders before acting as a guarantor and providing status inquiry reports on creditworthiness or standing as a guarantor for dealings with government departments.

1. BANK ASSURANCE

2. MEANING
• One of the main function of a bank is
to stand guarantee for commercial
and non-commercial transactions.
• When a bank performs this function
of acting as a guarantor it is also
called BANK ASSURANCE

3. IMPORTANCE
1. Bank Assurance is very popular in the
field of “letter of credit”.
2. Before acting as guarantor for the clients
for obtaining collateral securities, The
clients must be the customer/ account
holder of the bank.
3. Bank assurance helps in export trade
facilities and export financing.

4. IMPORTANCE
4. Banks are often approached by the businessman to find
out creditworthiness of party which is called status
inquiry. After submits the status enquiry report.
5. Bank also stand as guarantor on behalf of the
businessmen when dealing with govt.departments such
as income tax,sales tax,etc.