Letter Of Continuing Guarantee: Fill & Download for Free

"Avarice. Scene set in the Banco di San Giorgio in Genoa ”, miniature taken from the 'Treaty on the seven vices' (1330-1340 circa), British Library, London.Why was it safer to travel with a letter of credit or transfer from a Medici bank during the Middle Ages than with actual gold coins and couldn't somebody just take the letter from you and withdraw your gold anyway?Who: John Stagg (fictional)When: Middle AgesWhere: LondonWhy: John is preparing to travel the Silk RoadWhat: John has a chest full of gold coinsDate: c. 1360 * Gallery 207, European Art 1100-1500, Accession Number: 1930-1-89 Credit Line: Purchased with funds contributed by Thomas J. Dolan, Clarence W. Dolan, and H. Yale Dolan from the Edmond Foulc Collection, 1930Merchant John has a problem. Gold is heavy and thieves are everywhere. John could hire a small group of mercenaries, but he has no assurance they will not just murder him along the way and take his gold. What to do?His solution is to go to the Medici bankers. He will deposit his gold with them and receive a letter of credit.Letter of creditA letter of credit was one of the most important financial mechanisms that allowed international trade to flourish in the 15th century. As caravans wheeled, and ships sailed around Europe distributing fine goods, the letter of credit became a necessity for travelling merchants.An incredibly rare document from the heart of the Medici banking empire in Renaissance Italy, mentioning loans, credits, and exchange ratesA letter of credit is an agreement in which the buyer’s bank guarantees to pay the seller’s bank at the time goods/services are delivered. They would be authorised to receive pounds in the London branch, for example, at 40 pence to the florin exactly 90 days after (the timing was always fixed).*snip*Continuing our example from above, the London branch of the bank would then turn around and find someone wanting to purchase florins in Florence, but at the rate of 36 pence to a florin (currencies traded in different rates home and away). This little difference of 4 pence per florin gave the cunning Medicis a 22% annual return.When our John has his letter of credit, his next problem is to consider the theft of the letter. I had to consider it also. Researching turned up this:Identification of the HolderAs with all transactions with components that took place at a distance, correct identification of the participants was vital. An early example of the steps taken in relation to early letters of credit comes from a 1796 book The Seaman's complete daily assistant...., page 48"...[I]t is necessary for him who grants the letter, to give his correspondent a letter of advice, by post or otherwise, and to describe the complection [sic], garb, or any particular mark the person may have who is to be honoured with credit, in order to prevent fraud, for the bearer may lose the letter or be robbed of it, and the finder present it and receive such monies."So, a birthmark, a scar, a mole in a particular place would all be marks a thief could not duplicate. As illiteracy was still widespread in the Middle Ages, a thief might not be able to read the letter. Therefore, the bank and John might agree on an unusual piece of jewelry, a particular pair of shoes, or even a beard cut in a specific way.Our John may have had a ring similar to the one below, but a mark on the body would be the best identifier.Ring, maker unknown, setting 15th century, centre 2nd century BC-1st century BC. Museum no. 724-1871. © Victoria & Albert Museum, LondonThe Medici invented a system of banking and moving money on which modern banking was based.In 1459, Two Prominent Banks, One in Florence, the Other in Venice, Manage Their Loans With the Medicis | The Raab Collection“L’avarizia. Scena ambientata nel Banco di San Giorgio di Genova”, miniatura tratta dal ‘Trattato sui sette vizi’ (1330-1340 circa), Bri… | Middle Ages in 2019 | Medieval paintings, Medieval manuscript, Medieval lifehttps://www.metmuseum.org/toah/hd/best/hd_best.htm3 Medici banking innovations we still use today | EdologyMedici Bank - WikipediaLetter of credit - WikipediaMedici (Lorenzo de', 1449-1492).Philadelphia Museum of ArtThe Circular Letter of CreditV&A · A history of jewelleryThe Machiavellian Game Theorist is creating a Podcast and Travel Blog | Patreon

Work hard, publish lots of research, have important people as your mentors, those who are willing to write strong letters of recommendation for you, and be lucky. There are no guarantees.Be sure that's what you want. The life of a graduate student can be miserable and the life of an assistant professor even harsher although admittedly with a higher income. Being a professor is the greatest job in the world, but there are a lot of hoops you have to jump through and a long, unforgiving treadmill betweeen hoops.Finally, don't ask such an important question here, where even with the best of our intentions you will get incomplete information that may not be applicable to your situation. Ask people at the university where you do your graduate work. They can assess the possibilities having greater knowledge of your strengths and weaknesses.

PNB has alleged that two of its employees had “fraudulently issued Letters of Undertaking (LoUs) and transmitted SWIFT instructions to the overseas branches of Indian Banks” to raise buyers credit for Nirav Modi without “making entries in the bank system”.[Nirav Modi is a billionaire diamond jeweller.]WHAT IS LETTER OF UNDERTAKING OR LOU?Letter of Undertaking or LoU is a guarantee given by one bank to another bank to repay a loan on behalf of a client.It is generally used when a person imports something from a person in another country.Let’s say A from Mumbai imports something worth Rs.10000 from B living in HongKongA will have to make payment of Rs.10000 to B.So A will go his bank in Mumbai (Punjab National Bank) to get an LOU worth Rs.10000issued in favour of a bank in Hongkong (Allahabad Bank’s branch in the Hongkong).PNB will convey this to Allahabad Bank.Allahabad bank will immediately transfer Rs.10000 to a Nostro account. (Nostro account is an account held by an Indian Bank (PNB) with a foreign bank, Allahabad Bank in this case.)Rs.1000 is effectively a loan given to A by Allahabad Bank and guaranteed by PNB.A can use it to pay B.If A receives the goods, he will have to pay PNB. PNB will pay Allahabad Bank.PNB is giving a guarantee to Allahabad bank that loan will be repaid even if A defaults.WHAT IS SWIFT?It stands for Society for Worldwide International Financial Telecommunication. It connects all international banks worldwide. It serves as an instant messaging service. So, if PNB issues LoU to A, it will be conveyed to Allahabad bank through SWIFT.SO WHAT IS THE PNB FRAUD IN SIMPLE WORDS?Continuing with the above example, if A goes to PNB to get an LOU issued, PNB will require A to keep an equivalent amount of cash/ property as collateral. So if A defaults and PNB has to repay the loan on his behalf to Allahabad bank, PNB can recover its loss by attaching the collateral.But, Nirav Modi connived with bank employees to fraudulently acquire Letter of Undertaking or credit guarantee without proper documentation and collateral.An internal probe revealed that LoUs were issued for HongKong branches of two Indian banks on behalf of Nirav Modi.The bank employees conveyed it to the HongKong branches through SWIFT without getting proper authorisation from the senior officials.It could not be detected as PNB has not integrated SWIFT with the banks’ Core Banking System (CBS).[CBS is a centralised software that keeps records of all banking transactions across branches.]Hence, the LoUs were not recorded in the banks’ internal system.So basically PNB guaranteed loans on behalf of Nirav Modi without even being aware of it.In 2011, an LoU worth Rs. 800 crore was issued to a company associated with Nirav Modi.When the credit due was not paid in time, more LoUs were issued on its behalf to offset the payment.Basically, fresh loans were given to him when he could not repay the old ones.When the bank finally discovered this fraud, the overdue loans exceeded Rs.11000 crore.If you want to read more of such posts, subscribe to my blog FeedBurner Email Subscription