What is the Purchase Own a Bank Instrument such as BG or SBLC?

When a buyer purchases a bank instrument from a provider, it means that the buyer has the option to redeem the instrument for its full face value at the end of the year.

How can a Provider Sales an SBLC or BG for 50% of its Face Value?

When a provider sells a bank instrument, it is because they have a well-structured financial strategy involving various trading programs or platforms. With the cash received from the sale, they can reinvest in the commodity market for the full year. This allows them to not only cover the cost of the bank instrument but also generate significant profits during this process.

For example, let’s say you purchase a Bank Guarantee (BG) or Standby Letter of Credit (SBLC) from The Reliance Capital Finance Limited with a face value of 100 Million Euros, with the intention to cash it in one year and one day. You will pay 50 Million Euros in cash to the company. Upon receipt of payment, The Reliance Capital Finance Limited will deliver the BG or SBLC to you.

At the end of the year (1 year and 1 day), you will receive a 100% return on your investment, guaranteed by the bank instrument. However, during that year, once the initial 50 Million Euros is received, The Reliance Capital Finance Limited will reinvest the funds in the trading market. The company typically generates at least a 10% profit (or more) with each investment cycle.

For instance, The Reliance Capital Finance Limited might enter into a Joint Venture Agreement (JVA) with a trading platform that has a pre-arranged deal to receive one container of sugar per week throughout the year. Each container transaction provides 10% profit, and since there are 52 weeks in a year, that amounts to a total profit of 520% (or 260 Million Euros) of the initial 50 Million Euros invested. This profit is enough to pay back the 100% face value of the bank instrument, and still leave a substantial surplus, which will be shared between The Reliance Capital Finance Limited and the trading platform (JVA).

What Parts do Banks Play in BG / SBLC Transactions?

The Bank is not the initiator but the Deliverer of the Transaction.

Technically speaking, banks do not issue Bank Guarantees (BGs) or Standby Letters of Credit (SBLCs). Instead, the bank’s role is to confirm that their client has sufficient funds. The bank is essentially a delivery agent, working on behalf of the BG or SBLC provider—the actual asset owner, asset holder, or asset manager. To illustrate, imagine you use a courier to deliver a parcel to a customer. You, as the provider, own the parcel, and the courier acts as the delivery agent who transports the parcel from your location to the recipient. The courier is not the provider of the parcel; they are simply delivering it on your behalf.

Similarly, banks handle BGs and SBLCs in much the same way. The bank serves as the courier and receives a financial order from the provider to send one of the provider’s assets (BG or SBLC) to the receiver’s bank. In essence, banks are the intermediaries or delivery agents, facilitating the transfer of assets between the provider and the receiver. These transfers are typically executed through SWIFT messages, such as MT760 or MT799, where the bank acts as the sender and recipient of these financial instructions.

Why Banks Don’t Sale Bank Instruments BGs or SBLCs

If a bank wants to raise Capital, it **DOESN’T** uses BGs or SBLC because the bank either issues:

– A/ Bank Bonds  

– B/ MTNs (Mid Term Notes)  

– C/ Bank Stock or Shares  

– The bank NEVER uses its own cash to secure or encumber a Bank Instrument, such as a BG or SBLC. Instead, the BG or SBLC is secured against the client cash accounts held by the provider.  

– BGs and SBLCs are specialized financial products tailored for high-net-worth clients, created at the request of clients with significant cash holdings at the bank, rather than standard bank products. 

– When you approach a bank officer at a branch of one of the World’s Top 25 Banks and ask about purchasing a Leased Bank Guarantee, they may not be familiar with the term. BGs or SBLCs are not publicly offered bank products. Most bank officers will inform you that such instruments cannot be sold or leased. Instead, they are typically available only to high-net-worth clients who have sufficient funds in their bank accounts to secure the instrument.

– To issue a BG or SBLC as a provider, you must have a custodial account at a bank. A custodial account is a specialized account designed to release, receive, and hold financial instruments. Setting up a custodial account typically takes about three months* and can cost between €250,000 and €500,000 during the setup process. These accounts are usually reserved for the top 1% of private banking clients. You cannot simply walk into a bank and request to set up a custodial account.

– Once a client has a custodial account, they can issue BGs and SBLCs and sell them to other clients, not as a bank product, but as their own bank instrument. In this case, the bank is not involved in the sale agreement between the provider and the buyer.

Why are Bank Instruments Providers so Hard to Find?

1. Issuing BGs and SBLCs requires a highly specialized financial skill set, which is why there are very few genuine BG or SBLC providers. Most high-net-worth investors lack the expertise and time to engage in the complex process of issuing these bank instruments. 

2. The reality is that you need the bank instrument provider far more than they need you. Genuine providers are highly selective in choosing their clients, as they typically have more demand than they can fulfill.!  

3. High Net Worth corporations are typically the providers of bank instruments, as they have access to a wide range of investment opportunities.

4. As the monetizer fails to follow the transaction procedures, 80% of BGs and SBLCs delivered to third-party monetizers result in failure.AIL.

5. The bank instrument market is filled with uninformed investors who have little understanding of how bank instruments work or their purpose. Many mistakenly believe that BGs and SBLCs are given out for free, with no upfront fees, and that the world owes them something without any effort on their part.

Purchase Own a BG or SBLC

The only way to purchase a BG or SBLC is through a bank instrument provider like us by completing a Deed of Agreement (DOA). The terms and timelines are NON-negotiable. We strongly advise buyers to thoroughly review and understand all documents before signing. Ensure that your information is accurate and consistent, as any mistakes can result in significant costs.