Well, let us take up financial guarentee -- Say for Eg Goods bought on credit - Here the credit limit allowed by the supplier / vendor may be required to be backed by a bank guarentee
In such a case 1) Estmate the Annual credit purchase from the vendor concerned
2) Estimate the credit period the borrower ( bank borrower) wants to avail the vendor concerned ( say 2 months )
3) So 2 months purchase shall be the credit Amount and that would be the assessed Amount of Bank guarentee
Certain formats of CMA ( SBI) has provision for such calculation
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