Financial Instrument

Quoting from [dirgen]:


Dear Sir


What is the difference between MT103/23 and Bank Guarantee?

A bank guarantee is an instrument issued by a bank on behalf of a corporate customer that essentially ensures the bank as the guarantor of a financial obligation should the customer fail in their agreement to pay. A bank guarantee is more risky for the bank than a letter of Credit because the bank is ultimately the one who bears the risk of default should the merchant not perform on his/her obligation.

MT103 is the format of Swift transactions used in the Swift banking system. It’s the bank form used for TT transfers.  In short, this is what’s known in our forum as “tele-transfer, or TT”.

Quoting from [dirgen]:


Dear Sir


What is the difference between MT103/23 and Bank Guarantee?

In my views MT103/23 is virtually known as TT,that mean you have telegraphically transfer your funds. In case of Bank Gurantee your bank gurantee the second party on your behalf thathe will make the payment whenever you present the bank gurantee to the bank.

Quoting from [dirgen]:


Dear Sir


What is the difference between MT103/23 and Bank Guarantee?

Sorry gentleman but a MT103/23 is a swift message sent from buyers bank or an advising bank letting the seller/sellers bank know that a preadvised L/C is forthcoming.  In other words the message would inform the supplier that in fact a Letter of Credit has been opened.  The message would include the following:

• Name of the opener (Buyer)
• Buyers Bank
• Confirming Bank if any
• Assignees Bank  (Suppliers Bank)
• Assignee/Beneficiary  (Supplier)

Best regards,

Ranger

Quoting from [dirgen]:


Dear Sir


What is the difference between MT103/23 and Bank Guarantee?

A Bank Guarantee, depending on the wording of course is an undertaking by the Bank to perform what ever the banks client has undertaken to perform.It could be a payment or delivery of goods etc  otherwise known as full liability instrument issued on behalf of the bank client, against a security provided by the client.

An MT 103/23 is a money transfer which can be conditional/unconditional.