Contingent Liability Schedule-12

Prof.b.p.mishra
XIMB

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Schedule 12 - Contingent Liabilities

Claims against the bank not acknowledged as debt

Liability for partly paid investments
Liability on account of outstanding forward exchange
contracts
Derivatives
Guarantees given on behalf of constituents
Letter of Credit
Acceptances, endorsements and other obligations
Other items for which the bank is contingently liable
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 Non Fund based Credit Facilities

Non Fund based Credit Facilities

Involves only the issuing banks commitment to honor
certain promises as per the letter of Credit or
guarantee..without requiring any immediate outlay of
funds..However the outlay of funds may take place in
the event of the devolvement of the commitment on the
issuing bank.
These commitments are off balance sheet items.. Not the
part of balance sheet.
Non fund facilities are
Letters of Credit

Bank Guarantees
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 LC as a Financial Instrument:

Customer and Bankers Perspective

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 WHAT IS A LETTER OF CREDIT ?
Non Fund based Credit Facilities

A Letter of Credit is a payment term generally used for

international sales transactions.

It is basically a mechanism, which allows importers/buyers

to offer secure terms of payment to exporters/sellers in
which a bank (or more than one bank) gets involved.

The technical term for Letter of credit is Documentary

Credit

One must understand is that Letters of credit deal in

documents, not goods.

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Tuesday, October 10, 2017 6
IMPORTER/APPLICANT EXPORTER/BENEFICIARY
SALES CONTRACT

E
X E
A X
R A
M A
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I D

DOCS
SUBMITS
Q I
N V
U N
E I
E E
& SIMULATION S
S /
D E
T P
E S
L A
B
C Y
I TRANSMITS THE LC
T
FORWARD DOCS
PAYMENT/REIMBURSEMENT
OPENING BANK ADVISING/CONFIRM
ING/NEGOTIATING
Tuesday, October 10, 2017
BANK 7
 BROAD TYPES OF DOCUMENTARY CREDITS
BASED ON SECURITY TO BENEFICIARY

REVOCABLE IRREVOCABLE CONFIRMED UNCONFIRMED

BASED ON MODE OF SETTLEMENT

DEFFERRED ACCEPTANCE NEGOTIATION

PAYMENT
INVOLVING MIDDLEMEN

TRANSFERABLE BACK TO BACK

INVOLVING REPEATED TRANSACTIONS

STANDBY REVOLVING
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 REVOCABLE AND IRREVOCABLE CREDITS
Revocable credits can be cancelled or amended any time after
issue by the opening bank

This does not afford much of protection to the beneficiary

Irrevocable credit cannot be amended or cancelled without the

consent of the beneficiary

A credit is irrevocable even if there is no indication to that effect.

(Art 3)

A confirmed irrevocable credit offers maximum protection

Amendment to a confirmed credit needs the concurrence of the

confirming bank.

Tuesday, October 10, 2017 9

 BACK TO BACK CREDIT
Exporter receives a credit from his buyer
He has to procure goods from other suppliers
He opens a credit for purchase of the goods.
Second credit is said to be back to back to the first one.
Bill proceeds of the export LC will be used to meet liabilities under the
second.
Amount of back to back credit will be lower.
Usance period of the back to back credit should be equal to or more than
that of the export credit.
Bank still at risk if the customer fails to export
No concession in margin and security norms.

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 Back-to-Back Letter of Credit
Goods

Buyer Seller

Documents
Merchant
LC Application

Benef/ applct
Documents

Confirmed LC
LC Application

Payment
Documents

Payment

LC
Payment

LC & Req. to add Payment

Advising bank
confirmation Merchants bank LC
Issuing/ Buyers
Confirming Bank Advising/
Bank Documents Issuing Bank Suppliers Bank
Tuesday, October 10, 2017 Documents 11
 TRANSFERABLE CREDITS
Credit has to be opened as transferable
The beneficiary is normally a trader or agent
He transfers credit to his supplier - second beneficiary.
Transferred by a bank at the request of first beneficiary
Second beneficiary can supply goods and negotiate documents as
if he had received the credit.
He may pay commission to first beneficiary for the order
There can be more than one second beneficiary.
Normally no third beneficiary is permitted

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 Transferable credits
The following parameters may be changed while
transferring a credit
Amount of credit, unit price and quantity of goods
Date of expiry, last date of shipment and last date of
negotiation can be brought forward
% of insurance cover may be increased.
First beneficiary has the right to substitute documents
negotiated by second beneficiary and claim
difference amount from that bank.

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 Transferable Letter of Credit
Goods

Buyer Seller / Second

Beneficiary

Merchant

Documents
First Benef
LC Application

Of LC to 2nd benef
Transferable LC
Req. for transfer
Documents

Payment
Documents
Payment

LC
Payment

Transferable LC Payment
Advising bank
Merchants bank Transfer of LC
Issuing/ Buyers
Nominated Bank Advising/
Bank Documents Transfering Bank Suppliers Bank
Tuesday, October 10, 2017 Documents 14
 REVOLVING CREDITS

Credit is opened to cover a series of regular transactions over a longer

period
Beneficiary will submit a series of documents
Maximum value of each document will be fixed and is the revolving limit
LC amount is the maximum value of documents that can be handled
under the credit.
The credit may be reinstated automatically or after payment of earlier
bill.
It can be opened as cumulative or non cumulative.
Normally usance drafts are not allowed

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 STANDBY CREDITS

Credit is issued for a particular amount and for a particular period

Trade takes place on running account basis.
Beneficiary does not submit documents to bank.
If there is a default, he can claim funds from opening bank giving a
certificate of default
No quibbling over discrepancies and documents
Opening bank will pay on demand
Works like a bank guarantee
UCPDC is applicable if so declared in the credit (ISP98)

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 PROCESS FLOW IN LETTER OF CREDITS
Step 1 : Buyer and seller agree to conduct business.
Step 2 : Both buyer and seller enter into a contract/agreement
on the terms and conditions of transaction/shipment. The seller
wants a letter of credit to guarantee payment.
Step 3 : Buyer then sends the LC Application Draft to the
seller for his approval. Idea is to eliminate discrepancies before
the LC is opened.
Step 4 : Buyer applies to his bank for a letter of credit in favor of
the seller.
Step 5 : Buyer's bank approves the credit risk of the buyer, issues
and forwards the credit to its correspondent bank (advising or
confirming). The correspondent bank is usually located in the
same geographical location as the seller (beneficiary).
Step 6 : Advising bank will authenticate the credit and forward
the original credit to the seller (beneficiary) through Negotiating
/Beneficiary Bank
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Step 7 : Seller (beneficiary) ships the goods, then verifies and
develops the documentary requirements to support the letter of
credit.
Step 8 :Seller presents the required documents to the advising or
confirming bank to be processed for payment.
Step 9 : Advising or confirming bank examines the documents for
compliance with the terms and conditions of the letter of credit.
Step 10 : If the documents are correct, the
Negotiating/Beneficiary bank may negotiate the documents and
remit the proceeds to the seller/beneficiary or send it on collection
to the Issuing Bank.
Step 11: Issuing bank will examine the documents for compliance.
If they are in order, the issuing bank will debit the buyer's account.
Issuing bank then forwards the documents to the buyer.

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 ADVANTAGES OF LC FROM CUSTOMER PERSPECTIVE
-BUYER AND SELLER

The Bank scrutinizes the 'documents' and not the 'goods' for
making payment.Documentary Credit

The process works both in favor of both the buyer and the seller.

The Seller gets assured that if documents are presented on time

and in the way that they have been requested on the LC the
payment will be made.

The Buyer on the other hand is assured that the bank will
thoroughly examine these presented documents and ensure that
they meet the terms and conditions stipulated in the LC.

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 LETTER OF CREDIT ADVANTAGES FOR THE SELLER
Obligation of Buyers Bank: The seller has the obligation of
buyer's bank's to pay for the shipped goods. It also gives the legal
right of getting payment for the goods exported to a foreign
country.
Provision of Finance: The seller/exporter on the production of
shipping documents to the advising bank can obtain necessary
finance. (Post Shipment). The seller/exporter can also avail pre-
shipment finance from banks. In India, pre-shipment finance is
available at appx 10 % interest from banks subject to due
diligence

Credit Standing : Through the Letter of Credit, the exporter can

establish his credit standing both on the importer and the buyers
bank by proper delivery of the merchandise and the shipping
documents.
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 LETTER OF CREDIT ADVANTAGES FOR THE BUYER/IMPORTER

Risks Covered : The importer does not like to undertake an

unwanted risk. He by opening a letter of credit in favour of the
seller is saved the risk of making payments before the actual
receipt of goods. The importer will make payment to the bank in
his own country against delivery of shipping documents.
Business Expansion: The letter of credit greatly facilitates
overseas business and makes the payment of goods easy.

Credit Lines : The buyer/importer can avail credit lines from the
bank.

Control on Time Period : The buyer can control the time period
for shipping of the goods.

Solvency of the Buyer : The letter of credit, the buyer

demonstrates his solvency. 21
 BENEFITS TO THE BANKER

1. Increased Balances. There is no doubt that banks charge low rates of commission
but they offset this advantage by maintaining balances up to the line of credit so
that the drawings of the exporters are met under the credit. The balances, of
course, are the life-blood of every commercial bank.

2. Commission. The commissions charged by the banks vary with the kinds of letters
issued by them. Though the commissions are small yet when counted on the
whole they form a significant part of earnings of the commercial banks.

3. New Business Opportunities. The letters of credit provide new business

opportunities to the banks. The new firms which are engaged in the export and
import of merchandise are introduced to the banks which by serving them
effectively develop profitable relationship.

4. Interchange. If the importers bank serves effectively and honours the drafts
promptly of the corresponding bank, it creates good impression of the credit
standing at the importers bank. The exporters bank reciprocates by sending the
bulk of the business of the bank which has given better services.
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 STANDARD DOCUMENTS REQUIRED FOR LC NEGOTIATION

When making payment for product on behalf of its

customer/buyer, the issuing bank must verify that all
documents and drafts conform precisely to the terms and
conditions of the letter of credit.

Some of the common documents required :

1. Commercial Invoice
2. Bill of Lading
3. Packing list in case of Container Shipment
4. Quality and Quantity Certificate from Assayers like SGS,
Intertek etc
5. Certificate of Origin

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 BIGGEST RISK IN LC : DEFECTS IN DOCUMENTATION

A discrepancy is an irregularity in the documents that

causes them to be in non-compliance to the letter of credit.
Requirements set forth in the letter of credit cannot be
waived or altered by the issuing bank without the express
consent of the customer.

The beneficiary should prepare and examine all documents

carefully before presentation to the paying bank to avoid
any delay in receipt of payment.

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 ASSESSMENT OF LC LIMIT : ILLUSTRATION
M/s XYZ COMPANY LIMITED
LETTER OF CREDIT LIMIT OF Rs. 20 CRORES
(Rs. in crores)

Total purchase of Raw Materials (RM) 172.64

Purchase of RM under LC 69.41

Average monthly purchase of RM [A] 5.78

Average usance period [B] 3 months

Lead time & transit period [C] 1 month

Total of [B] & [C] [D] 4 months

Requirement of LC Limit [A] x [D] 23.12

LC Limit recommended ( MINUS MARGIN- 3.12) 20.00

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 ASSESSMENT OF LC LIMIT

While assessing Letter of Credit Limit, the

following points need to be noted:
Purchases of RM on LC basis should be net
of Import Duty
Transit time should be treated as Nil if
usance period starts from shipment date

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 INCOTERMS 2010 ARE ARRANGED IN TO 7 TERMS-

CIP Carriage Insurance paid

CPT Carriage Paid to
DAP Delivered at Place
DAT delivered at Terminal
DDP Delivery duty paid
Ex-W Ex Works
FCA Free Carrier

The above can be used for all mode of transportatio

I,e. by Sea, Air, Road, or Rail

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 4 terms which can be used only
for Sea Or inland water ways.

CFR Cost & Freight

CIF Cost ,Insurance and freight
FA S Free alongside Ship
FOB Free on Board

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 They can be used in Domestic transaction
Within the country.
Within the custom union also.

Therefore the title is rephrased as-

ICC Rules for the use of domestic and international trade terms.

Tuesday, October 10, 2017 29

Bank
Guarantee

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 INTRODUCTION
A contract of guarantee is defined as a contract to
perform the liability of a third person in case of
default. The parties to the contract of guarantee are:
a. Borrower : The principal debtor : The person at whose request
the guarantee is executed.
b. Bank : The person to whom the guarantee is given and who can
enforce it in case of default.
c. Guarantor : The person who undertakes to discharge the
obligations of the applicant in case of his default.

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 PURPOSE OF ISSUE OF BGs
BGs may generally be issued for the
following purposes:
a. In lieu of Security Deposits / Earnest Money
Deposits for participating in tenders.
b. Mobilisation advance or advance money before
commencement of the project by the contractor
and for money to be received in various stages like
plant layout, design / drawings in project finance.
c. In respect of raw material supplies or for advances
by the buyers.
d. In respect of due performance of specific contracts
by the borrowers and for obtaining full payment of
the bills.
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 Non Fund based Credit Facilities
Types of Guarantees
Financial Guarantee :Purely secure the monetary
obligationthese are issued by banks on behalf of oft their
customer
Performance guarantees: the customer would honor the
contract as per the conditions stipulated, falling which the bank
will compensate the third patty(Benefiarry) to the extents of
amount specified in guarantee.
Deferred Payment GuaranteeThese guarantees are issued for
purchase of equipments on deferred payment terms in favors of
suppliers. The payment of installments remaining after down
payments (Deferred portion of payment) by the purchaser on
various due dates granted by the purchasers Bank . The DPG
are substitute of term loans which might have been
guaranteed by the banks to the customer( buyer).
The only Difference is Term loan is fund based while DPG is
non- fund based unitll the invocation of the Supplier 33

(beneficiary ) in case of default in paying the installments on

any due date.
GUIDELINES ON CONDUCT OF BG BUSINESS

While issuing Financial Guarantees, branches should satisfy

themselves that customers would be in a position to reimburse the
Bank in case the Bank is required to make the payment under the
guarantee.
In case of Performance Guarantee, branches should exercise due
caution and have sufficient experience with the customer to satisfy
themselves that the customer has the necessary experience,
capacity, expertise and means to perform the obligations under
the contract and no default is likely to occur.

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GUIDELINES ON CONDUCT OF BG BUSINESS
Branches should not issue guarantees valid for more
than 18 months without obtaining prior
administrative clearance of the appropriate authority
through their respective controlling authorities.
No Bank Guarantee should normally have a maturity
of more than 10 years. BG beyond maturity of 10
years may be considered against 100% cash margin
with prior approval of the Controllers.

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 GUIDELINES ON CONDUCT OF BG BUSINESS
Branches should normally refrain from issuing
guarantees on behalf of customers who enjoy other
credit facilities not with them but with other banks.
Unsecured guarantees, where furnished by
exception, should individually be for a short period
and for relatively small amounts.
All DPGs should ordinarily be secured.

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 APPRAISAL OF BG LIMIT
Branches should appraise the proposals for
guarantees with the same diligence as in the case of
FB Limits. They may also obtain adequate cover by
way of margin and security so as to prevent default
on payments when guarantees are invoked.
Whenever an application for the issue of BG (or
sanction of a regular BG Limit as part of WC Limits) is
received, branches should examine and satisfy
themselves thoroughly about the following aspects:

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 APPRAISAL OF BG LIMIT
a. The need for the BG and whether it is related to the applicants
normal trade / business.
b. Whether the requirement is one-time or on a regular basis.
c. The nature of BG, i.e., Financial or Performance.
d. Applicants financial strength / capacity (through an analysis of his
financial statements, Cash & Funds Flow position and opinion
reports) to meet the liability / obligation under the BG in case of
invocation.
e. Past record of the applicant in respect of BGs issued earlier, e.g.,
instances of invocation of BGs, the reasons thereof, the customers
response to the invocation, etc.
f. Present outstanding on account of BGs already issued.
g. Margin
h. Collateral security offered.
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ASSESSMENT OF BG LIMIT

Assessment of BG Limit

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 MARGINS
Following are some of the factors to be kept in view
by the branches while determining the margins
required:
a. Cash margins provide a cushion against invocation. Margin
money may be in the form of TDR or a lien marked on the DP
in the constituents CC Account. (Specific approval of
sanctioning authority is required in respect of the latter).
b. The margin to be stipulated would depend on the borrowers
means, resources, creditworthiness, security available, past
experience with regard to issue of BGs, nature of guarantee
and the nature of underlying transactions. If existing
borrower, margin on BG may generally be the same as on
Stocks, Receivables, etc.
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 MARGINS
c. In case of Advance Payment Guarantees, lower margins
may initially be stipulated. Once the advance is actually
received, depending on the amount not likely to be
immediately utilised, higher margins may be built up by
impounding of cash advances.
d. In respect of non-borrower applicants, Banks approach
should normally be to obtain full margins. However, a
credit risk can be taken on the applicants based on the
financial indicators, credit worthiness, security available,
etc.
e. 100% margin should ordinarily be retained in respect of
guarantees issued in connection with disputed Customs /
Central Excise duties, unless otherwise specified in the
sanction. 41
 SECURITY
Apart from the margin, BGs are usually secured by an
extension of the charge on Current Assets obtained
to cover WC facilities.
Adequate collateral security by way of Equitable
Mortgage / Extension of charge on Current / Fixed
Assets or third party guarantee should be taken
depending on the merits of each case.

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 DOCUMENTS
Whenever a guarantee is issued and / or guarantee
bond is countersigned by the Bank on behalf of a
constituent, suitable Counter Guarantee should be
obtained from the constituent.
For each ad hoc BG issued, a separate Counter
Guarantee is necessary.
In the case of a regular BG Limit duly sanctioned, a
stamped Omnibus Counter Guarantee for the BG
Limit will suffice.

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 DOCUMENTS
In case of a Partnership Firm, Counter Guarantees
should be signed / executed by all the partners of the
Firm.
In case of Joint Stock Company, a Board Resolution
should be got passed by the Company before executing
the Counter Guarantee or Omnibus Counter
Guarantee.
Both the Bank Guarantee (to be executed by the Bank)
and the Counter Guarantee or Omnibus Counter
Guarantee (to be executed by the applicant / borrower)
are to be stamped as agreements as per Stamp Duty
required at the place of execution.
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 FORMAT OF BANK GUARANTEES
BGs should normally be issued on the format
standardised by IBA. When it is required to be issued
on a format different from the IBA format, as may be
demanded by some of the beneficiary Government
Departments, it should be ensured that the BG is:
a. For a definite period.
b. For a definite objective enforceable on the happening of a
definite event.
c. For a specific amount.
d. In respect of bona fide trade / commercial transactions.
e. Contains the Banks standard limitation clause.
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 FORMAT OF BANK GUARANTEES
f. Not stipulating any onerous clause.
g. Not containing any clause for automatic renewal of the BG on
its expiry.

BGs should be issued with a pre-printed and

numbered standard first page of the guarantee form,
which contains the limitation clause.
The pre-printed form is to be used for all BGs.
However, in case of a guarantee favouring a Govt.
Dept. objects to the use of the pre-printed form,
branches may issue the guarantee on non-judicial
stamp paper.
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 FORMAT OF BANK GUARANTEES
The text of the guarantee will appear on the pages
succeeding the printed first page. It should be
ensured that while filling up the first page of the BG,
no separate claim period is provided.
The validity period of the guarantee will be stated
inclusive of the claim period.
Further, each page of the text of the guarantee
enclosed with the pre-printed form should also
mention pre-printed serial number, BG number, date
of issue and amount, etc.

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 FORMAT OF BANK GUARANTEES
In all the guarantees issued by the Bank, the
limitation clause suggested by IBA should invariably
be incorporated at the end of the ext as concluding
paragraph of the BG.
Notwithstanding anything contained herein:
a. Our liability under this BG shall not exceed Rs. (Rupees
only);
b. This BG shall be valid upto..; and
c. We are liable to pay the guaranteed amount or any part thereof
under this BG only and if only if you serve upon us a written
claim or demand on or before . (date of expiry of
guarantee).
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 EXTENSION / RENEWAL OF BGs
Branches may entertain requests from the applicants
for extension / renewal of guarantee provided there
is no change in the amount and other terms and
conditions of the guarantee.
Expired BGs may also be renewed with retrospective
effect subject to the condition that the Bank remains
indemnified as against the contingent liabilities, etc.,
which may arise under the said guarantee, i.e., the
Counter Guarantee covers such liabilities
retrospectively.

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 EXTENSION / RENEWAL OF BGs
Normally, requests for extension should emanate
from the applicants. In case, however, the
beneficiaries request the branches either to renew or
pay the guarantee amount, the branches should
acknowledge such letters to the beneficiaries and
request the applicants to renew before the
guarantees expire or deposit the guarantee amount
for honouring the commitment. If no request for
renewal is received by the branches in time, they
should honour the guarantees invoked and recover
the amount paid from the applicants in the usual
manner.
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 ISSUE OF BGs WITH AUTOMATIC RENEWAL CLAUSE

Requests may be received from the undernoted

authorities / concerns in respect of units financed by
the Bank for issue of guarantees with an automatic
renewal clause:
Customs Authority for guarantees relating to import of
capital goods / raw materials
Courts towards disputed liabilities
Overseas Project Owners in respect of project exports

Such requests may be entertained in line with extant

instructions.

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 TERMINATION / CANCELLATION OF BG
Bank Guarantee can be cancelled:
a. Prior to expiry of the period only with the written
consent of the two parties to the contract, i.e., the
beneficiary and the applicant, or
b. On the expiry of claim period.
In cases where the guarantee duly cancelled is
received back before the expiry date, the liability will
be marked off in branch books. However, the
commission for the balance period is not refundable
if the purpose for which the guarantee was issued
has been fulfilled.
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 REVERSING THE ENTRIES RELATING TO EXPIRED BGs

Branches would review the position before 10th of

March every year and confirm to their Controllers
that no expired guarantee (beyond the waiting period
of 1 month for receipt of the expired BG) is reflected
as outstanding in their respective books.
Non-compliance would result in inflating the
Contingent Liability of the Bank, thereby imposing an
avoidable need to meet the additional Capital
Adequacy requirement.

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 INVOCATION OF BANK GUARANTEE
The beneficiary of the BG can invoke in writing, the
guarantee any time before the expiry of the
guarantee period. Invocation can be done by Telex /
Telegram / Hand Delivery also followed by Mail
Confirmation.
Branches should ensure that all valid claims received
by them under BGs issued by them are settled
promptly.
In the case of any dispute, such honouring, on
invocation, will be done under protest and the
matters of dispute should be pursued separately.
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 DEFERRED PAYMENT GUARANTEE (DPG)
A DPG is a contract to pay to the supplier the price of
the machinery supplied by him on deferred terms to
the buyer, in agreed instalments with stipulated
interest on the respective due dates in case of default
in payment by the buyer.
Under the contract, the Bank executes a guarantee
on behalf of the buyer to the sellers banker, who on
the strength thereof, discounts the sellers bills drawn
on the buyer.

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 DEFERRED PAYMENT GUARANTEE (DPG)
The seller receives payment for the P&M by his bills
being discounted by his banker, and the buyer repays
his obligations in instalments to the sellers banker by
retiring those bills on the respective maturity dates.
The period of DPGs should not ordinarily exceed 7 to
10 years.
The standard covenants for DPGs are generally the
same as those for Term Loans.

56
 DEFERRED PAYMENT GUARANTEE (DPG)
Where both the buyer and seller have common
banking arrangements, i.e., both are Banks
constituents, DPGs as such will not be required to be
executed. Instead, the Branch which handles the
buyers account will issue a Letter of Commitment to
the discounting Branch handling the sellers account,
authorising the discount of bills without a separate
DPG.
The issue of such a Letter of Commitment on behalf
of the buyer, however, should be treated on par with
a DPG for all purposes.
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 DEFERRED PAYMENT GUARANTEE (DPG)
The liability of the Bank under DPG will be the
amount for which the guarantee is issued inclusive of
interest. The liability should be reduced by the
amount of instalments, inclusive of interest
component, as and when they are paid.
In the case of DPGs issued in forex, the conversion
rate for control entries will be the BC Selling Rate for
the currency concerned ruling on the date the
guarantee is issued. Entries will be reversed as and
when the amounts are paid, at the same rate at
which the original entry was passed.
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 EXPORT PERFORMANCE GUARANTEES
Export Performance Guarantees are those which are
executed favouring the Customs Department for
amounts linked to the Customs Duty relief availed by
the exporter customers on imports of capital goods
under the Export Promotion Capital Goods Scheme.
The guarantees are for the due fulfilment of a
specified level of export obligation undertaken by a
customer to avail of the Customs Duty remission on
the imports.

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 BGs IN FAVOUR OF OTHER BANKS / FIs
Branches should not issue guarantees favouring other
banks / FIs / other lending agencies for the loans
extended by the latter, as it is intended that the
primary lender should appraise and assume the risk
associated with sanction of credit and not pass on
the risk by securing itself with a guarantee.

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 BGs FVG. GOVT. DEPTS : CORRESPONDENCE
In respect of guarantees issued by the branches
favouring Government Departments, branches
should not address any correspondence to the
President of India, although such guarantees are
favouring the President of India.
The correspondence relating to such guarantees
should instead be addressed to the concerned Govt.
Ministry / Departments.

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thanks

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