Deferred Payment


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.


A loan arrangement in which the borrower is allowed to start making payments at some specified time in the future. Deferred payment arrangements are often used in retail settings where a person buys and receives and item with a commitment to begin making payments at a future date.
Deferred payment guarantees
The bank at request of customer issues such Bank Guarantee when he purchases goods or machinaries from a creditor on the terms of payment after a specified time in lump sum or in instalments. The creditor requires such deferred payment terms to be guaranteed by the bankers of the principal debtor. Such a Bank Guarantee contain an undertaking by the banker that that deferred payment shall be made by the principal debtor, failing which the banker shall pay the amount to the creditor. These types of guarantees normally arise in the case of purchases of machinery or such capital equipment by industries or other party/ies.




Tuesday, 05th Apr 2016, 11:38:59 AM

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