Demand Guarantee check0 / 1 answered · 0 correct
Check 1
Does an authentic guarantee force another bank to lend against it?
Financeability and Red Flags
Understand what a financier may examine before relying on a guarantee.
Issuer and counterparty risk
A financier considers who issued the guarantee, the bank’s acceptability, country risk, sanctions/compliance and whether the obligation can be authenticated.
Wording and drawing conditions
The financier asks whether the guarantee can actually be drawn, whether expiry is adequate and whether proceeds/rights can be used in the proposed financing.
Purpose and transaction
A genuine guarantee does not validate every transaction built around it. The financing structure, parties and underlying commercial purpose are reviewed separately.
Red flags
Guaranteed monetisation, extraordinary returns, unverifiable bank officers, unexplained advance fees and claims that “MT760 itself is cash” require serious independent verification.
Remember thisAuthentic guarantee ≠ drawable guarantee ≠ acceptable collateral ≠ approved financing.
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