CHAPTER 36 - DIFFERENCE BETWEEN STANDBY
CREDIT AND BANK GUARANTEES
Standby
credits and Bank (Demand) guarantees
·
Although it is not always easy to distinguish from the basic
wording, there is a difference between a standby letter of credit and a normal
demand guarantee. Demand guarantees are usually subject to the Uniform Rules
for Demand Guarantees (URDG), ICC Publication No. 758. And Standby Letter of
Credit is usually subject to International Standby Practices (ISP), ICC
Publication No. 98. An individual will always need to check the transaction to
ascertain the exact set of rules under which the instrument is, or is to be, issued
(As per CDCS Textbook).
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