SBLC
Business & Finance abbreviation · Banking
| Stands for | Standby letter of credit |
|---|---|
| Categories | Business & Finance |
SBLC stands for Standby letter of credit, a banking abbreviation.
Bank's undertaking to pay a beneficiary if its customer fails to meet a contractual obligation, such as paying a supplier or completing a project. Unlike a commercial letter of credit, an SBLC is meant to be drawn only in case of default.
Example: The landlord accepted an SBLC from the tenant's bank in place of a cash security deposit.
Usage notes
SBLCs are widely used in the United States, where banks were historically restricted from issuing guarantees, and are usually governed by the ISP98 or UCP 600 rules. Fraudsters promote fake "leased SBLC" investment schemes, which regulators have repeatedly warned against. Outside the US, a bank guarantee serves a similar purpose.
Related abbreviations
More banking abbreviations
- RTGS – Real-time gross settlement
- RTN – Routing transit number
- RTP – Real-Time Payments
- RWA – Risk-weighted assets
- S&L – Savings and loan association
- SAR – Suspicious activity report
- SCA – Strong customer authentication
- SEPA – Single Euro Payments Area
- SIFI – Systemically important financial institution
- SLR – Statutory liquidity ratio
- SO – Standing order
- SWIFT – Society for Worldwide Interbank Financial Telecommunication