According to documentation and references related to HDFC Bank, an LG Code is a bank-specific identifier used primarily in the context of Letters of Guarantee (LG) or Letters of Credit (LC) transactions. So, exactly what is LG code in HDFC Bank salary account? These are financial instruments commonly used in trade finance. The LG Code, like the LC Code, helps the bank and its correspondent or beneficiary institutions identify and process such guarantee-related transactions reliably.
What is a LG Code in HDFC Bank?
Specifically, the LG Code acts as a unique reference for your HDFC Bank salary account or business account when issuing or managing a Letter of Guarantee.
This code ensures that the guarantee facility can be traced correctly to your account, facilitating smooth fund flows between buyers and sellers, and confirming payment obligations when the terms are satisfied.
To obtain your LG Code, HDFC Bank advises connecting with your relationship manager or customer service, especially if you hold a business or salary account and intend to apply for a guarantee.
In practice, such a code may also be listed alongside LC Code, Company Code, and Branch Code on forms such as account opening or demat‑trading forms. It typically appears within sections labeled “LG Code & LC Code” and is mandatory for processing trade‑finance products via HDFC’s systems.
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I got to know about the LG code a few months ago when I was updating my employer’s details at HDFC Bank. It is nothing, but a document provided by the bank which gives a guarantee of payment to the exporter if the applicant fails to fulfil their contractual obligations. It was my grandfather who explained to me what is LG code in HDFC Bank.
What is LG Code in HDFC Bank Salary Account?
LG is a written commitment that provides an assurance by the bank to facilitate smooth flow of funds between the buyer and the seller. It is a confirmation that provides a guarantee of payment if all the terms and conditions of an L/C are complied with. I also found some unique features of LC services in HDFC Bank.
You get the expertise from Certified Trade Specialists
You can apply for LC online via the TradeOnNet portal
The services are accessible widely with
100% branches equipped to issue all types of LCs.
So, LG stands for a letter of guarantee, also known as a letter of credit, and is a document that ensures timely payment from the buyer.
I also did some research to understand
what is LC code HDFC and found their charges and commission, which I have shared below.
Description |
Documentation Charges |
Commision |
SWIFT/Courier |
Letter of Credit FCY issuance (FCY/LCY) |
Rs. 1,500 |
Fedai charges * / IBA ** Min ₹ 2,000. |
FCY - Rs. 2,000 SFMS / LCY - Rs. 1,000 |
SBLC Issuance (FCY/LCY) |
Rs. 1,500 |
1.8% Per annum, min Rs. 2,000 |
FCY - Rs. 2,000 SFMS / LCY - Rs. 1,000 |
Guarantee issuance (Financial, Performance) |
Rs. 1,500 |
1.8% Per annum, min Rs. 2,000 |
Rs. 1,000 |
I hope this was helpful.
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What is LG Code in HDFC Bank?
Arshi
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2024-10-25T10:20:27+00:00 2024-10-30T16:19:21+00:00Comment
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