01
Underlying obligation
Applicant and beneficiary agree the contract or obligation that the standby is intended to support.
Procedure guide
SBLC / MT760 Procedure
A typical standby lifecycle, including the common bank-policy and negotiated variations people encounter in provider and bank-to-bank procedures.
02
Standby application and wording
The applicant asks its bank to issue the standby and provides proposed wording, beneficiary details, amount, expiry and applicable rules.
03
Credit, collateral and compliance review
The bank assesses customer exposure, cash/facility support, legal terms, KYC, sanctions, country and transaction risk.
04
Possible preliminary bank communication
Some transactions use pre-advice, readiness messages or other bank-to-bank communication before issuance. This is not a universal SBLC requirement.
05
Possible BPU/payment-assurance variation
Some third-party/provider procedures ask the receiving side for a bank payment undertaking or payment assurance before the provider bank issues MT760. Whether a bank will do this depends on its product, credit and legal approval; it is not an ISP98 requirement for every standby.
06
Issue the standby
After approval, MT760 is the structured SWIFT message used to issue a demand guarantee or standby letter of credit.
07
Advise and authenticate
The advising bank receives the bank message, checks its apparent authenticity and advises the standby to the beneficiary.
08
Standby remains outstanding
Normally the standby simply remains available until expiry while the applicant performs the underlying obligation.
09
Amendment, extension or non-extension
Changes may require agreement and bank processing. MT767 is the SWIFT MT message used for amendments to guarantees/standbys.
10
Demand or expiry
If a drawing event occurs, the beneficiary presents the demand and any required documents. The bank examines the presentation; otherwise the standby eventually expires or terminates according to its terms.
Where MT799, MT759 and BPU can appear
Some bank-to-bank or third-party provider procedures add preliminary messages before MT760. MyGreed treats these as a separate negotiated layer, not as an automatic “standard SBLC procedure.”
- MT799 is a free-format message; the legal effect depends on what the bank actually says and agrees to undertake.
- MT759 is an ancillary structured trade message used for certain trade-related information exchanges.
- BPU can describe a bank payment undertaking, but there is no universal rule requiring every beneficiary/receiver bank to issue one before MT760.
- A genuine bank may accept, change or refuse the proposed sequence based on credit, legal, compliance and product policy.
Remember thisMT760 issuance is the core bank-message event. Preliminary MT799/BPU-style steps may exist in some deals, but they are not universal prerequisites for every SBLC.
Reviewed: September 2026Standards and bank policy can change.How MyGreed classifies proceduresOfficial-source directory