Pros and Cons of Bank Guarantees
In the previous article, we have already studied what bank guarantees are and how these bank guarantees are provided by a commercial bank as a value-added service to their corporate customers. We are also aware of the various types of bank guarantees as well as their purposes. In this article, we will understand some of the pros and cons which are associated with bank guarantees.
Pros of Bank Guarantees
Commercial banks provide bank guarantees to a large number of corporate clients. These bank guarantees provide significant revenue to commercial banks. These guarantees are available to corporate customers because of some benefits. An indicative list of some of these benefits has been mentioned below:
Cons of Bank Guarantees
There are certain disadvantages that are associated with bank guarantees as well. It is important for corporations as well as commercial banks to understand these cons before making any final decision.
After all the points are considered, one can say that bank guarantees provide more advantages than disadvantages. This is the reason why they are extremely popular amongst the business community in most parts of the world.

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