How are non-fund limits like Letters of Credit, Bank Guarantee, DPG, and APG limits fixed by the banks?
The assessment Letter of Credit, Bank Guarantee (BG), or Letter of Guarantee (LG) limits are fixed by banks based on the annual consumption of raw materials to be purchased against the Letter of Credit or Letter of Guarantee (Bank Guarantee). Ascertain from the customer the requirement of Consumption of Material (CM) per annum, which is to be…