Bank Confirmation Letter (BCL) is the letter that can be obtained from the bank or the financial institution confirming the creditworthiness of the customer. The proof of funds is usually used in the commodities transaction to demonstrate the financial capability of the buyer.
Let’s know about it in detail here.
The bank confirmation letter can be obtained from the financial organization or any other bank where you have an account. The bank will confirm the existence of the loan or your creditworthiness in a document which you can use for the transaction.
This letter is the official document that the client or the individual is allowed to borrow money or carry out the trading. The borrower can be an individual, company or organization. So, where can you get the bank confirmation letter? Know that not all banks will provide these services.
Hence make sure that you choose the right financial organization where you can get the banking instruments. Especially you can get these from offshore banks. If you are running a business then know that having an offshore bank account will be helpful in many ways.
Apart from financial management, investment management and risk management, you can get many other services that can be used for business development. Especially get the financial instruments to make the trading process easier.
Therefore, based on your need, you can get the bank confirmation letter that acts as the document that confirms the creditworthiness of the company. This bank confirmation letter can be obtained by applying it to the financial organization.
How does the Bank Confirmation Letter (BCL) work?
The underlying purpose of the Bank Confirmation Letter (BCL) is to assure the third parties that the borrower has the access to the financial resources to complete the required transaction. Hence, the confirmation letter is also referred to as the comfort letter. This is because it comforts the seller that the buyer has sufficient funds to complete the financial commitments they have made.
The proof of funds can be obtained from the corresponding bank when you apply for it. But note that you cant transfer the bank confirmation letters from one party to another. The bank confirmation letter is certainly relevant to a particular project only.
Hence based on the project you can get the bank confirmation letter. It can be based on the deal or purchase. For example, let’s assume that you are buying goods or services for your company from an unknown seller. To prove your creditworthiness you can get proof of funds from your bank. You can apply for it online by submitting the required documents and information.
The bank will process your request and verify your financial transactions and offer the Confirmation Letter (BCL). Now you can use it by sending it to the seller. The seller will gain confidence in you and will complete the trading. But note that the bank will only confirm your creditworthiness and doesn’t offer a guarantee for the payment. Thus, to gain trust from the seller apply for the bank confirmation letter and use it for any business trading.
