industryterm:bank guarantee

#mit’s Interesting Proposal for a More Stable Financial System
▻https://hackernoon.com/mits-interesting-proposal-for-a-more-stable-financial-system-c45c6dbf5d0

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MIT’s Digital TradecoinOn the 16th of January 2018, three diamond firms approached Punjab National Bank requesting LOUs. (Letter of Understanding is a form of bank guarantee under which its customers can raise money from any other Indian bank’s foreign branch in the form of a short-term credit). Punjab National Bank demanded 100% cash margins (profitability) as a common requirement to issue LOUs. But, the firms responded back stating this requirement was not enforced for the previous LOUs they received since 2010.That’s when the Punjab National Bank got suspicious. Few bank employees had been issuing fake LOUs through the SWIFT system(Messaging system between banks). The software which PNB used didn’t make a record of such transactions. Hence PNB was not aware of such activities. Later on (...)

#technology #bitcoin #cryptocurrency #innovation

Kuwait threatens to expel Indians over diplomatic spat - ArabianBusiness.com
▻http://m.arabianbusiness.com/kuwait-threatens-expel-indians-over-diplomatic-spat-574796.html

Kuwait has threatened to impose an immediate ban on Indian expatriates moving to the country as the Asian nation refuses to back down on a plan to enforce a bank guarantee on foreign employers.

India has said it will require a $2500 bank guarantee to recruit an Indian domestic worker overseas.

Kuwait has disputed the move and on Wednesday it held high level diplomatic talks with the Indian ambassador to Kuwait.

However, Kuwait Times reported the ongoing discussions had failed to resolve the issue, leading Kuwait to threaten a ban on new Indian workers in the country, which could become effective as early as Thursday.

There are about 800,000 Indians in Kuwait, making them the highest non-citizen community in the Gulf state, according to government figures quoted by Kuwait Times.

About one-quarter are domestic workers.

The Indian embassy has said the bank guarantee was initiated in 2007 already has been applied in several countries, including all other Gulf states.

It emphasised that the money would be returned to the employer as soon as the employment contract ended, pending any financial disagreements.

China’s shadow currency
▻http://thediplomat.com/2013/12/chinas-shadow-currency/?allpages=yes #China #finance #currency

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Bankers acceptance notes (BANs) are nothing more than post-dated checks with a bank guarantee. But in China, this prosaic instrument of commerce has become a kind of shadow currency - money supply for the under-reserved banks, out of the central bank’s control. What happens when the world’s second largest economy must resort to passing around IOUs ?