PSYCHOLOGICAL HURDLES AGAINST PAYMENT OF UPFR0NT FEES FOR BG/SBLC

By Hussain Khan, M. A., Tokyo

 

Please never give up if you cannot find a Provider who works on No Upfront Fee, Bank to Bank Procedure, as we do not do that. Successful persons never give up. All great men have become great because they have taken great risks. They try to overcome all hurdles on their way. But in case of our current procedure, it is neither a great nor a small risk at all. Why there is no financial risk? That I will explain later. There is no financial risk. It is rather a problem of psychological hurdle, not financial.  

1st Psychological Hurdle 

What is that psychological hurdle? The very concept of 'Paying Upfront Fee' is abhorring for most of the clients, especially for those who can give BCL or POF. It is unacceptable for their Pride. Their logic is that they can give POF of millions of dollars of POF, why should they pay any UPFRONT FEE'? It is beneath their dignity to pay meager few thousand dollars Upfront Fee, while they are capable of giving Bank POF of several million dollars. They cannot face such humiliation. 

One answer to this question is that most of the Providers are abandoning that Procedure due to big losses they have suffered under it. They have to pay FIRST Bank charges more than $50,000 or 0.0125% of face value from their pocket in advance on behalf of the client to send swift MY799 RWA after receiving POF from the client Bank. But POF is not a commitment of Payment on behalf of the client.  It is just information about the client capacity to pay.  

Banks usually issue BPU (Bank Payment Undertaking) after receiving our MT799 RWA. But for some reason or other banks have a legal option to send or not to send any BPU. In such cases, the client loses nothing. But Providers lose their Transmission Fee payment of $50,000 or over. Due to suffering of such huge losses, many Providers, including ours one as well, have abandoned No Upfront Fee, Bank to Bank Procedure.  

Therefore, it will be very difficult for you to find such genuine Provider. But if you find any one, please go ahead with him. In such a case, we are ready to Monetize your BG/SBLC at 60% LTV, if you so desire. Please do not give up, if you could not find any such Procedure, In that case it is better to consider the option of "Paying Upfront Fee' instead of giving up your dream of making millions.  

2nd Psychological Hurdle 

The 2nd Psychological hurdle is Fear. How to overcome this fear? There are 3 criteria for the judgment regarding a Provider to whom you should or should not deposit your money as Upfront Fee. Those are following: 

1)    Location, roots and the whereabouts 

2)    Character 

3)    Performance 

The explanation of these three factors are as follows: 

1)  Location, roots and the whereabouts 

They fear that they will lose Upfront Fee. Giving money to some unknown person they came to know only on Internet is extreme foolishness, Clients don’t know their location, roots and their whereabouts, Such persons have rented offices in some big European cities like London, Paris, Geneva etc. declaring themselves as Providers. No one knows where do they live and what is their background. Therefore the fear of losing money is quite genuine. 

In our case, this fear is not applicable. Provider location is same since centuries. He is living in his ancestral home which he got in inheritance from his forefathers. Secondly, he is a senior Bank Officer since last over 20 years. Can you imagine such a Provider will run away with your Upfront Fee leaving away his centuries-old estate and over 20-year old job? 

He invites you to come and see him and ascertain these facts. If you personally meet him in Indonesia, you will see that he is not working through a rented office only in some London street. If such a fake Provider runs away with your hard-earned money, there will be no way to trace him out. A lot of clients have met such fate. Therefore, their fear is genuine, but it is not applicable in case of our Provider. 

2)  Character 

Secondly, when you meet a person personally, you make some judgment about his character. You form some opinion about him. You come to some conclusion whether the person you have met is a fraudulent one or a truthful one.   

3)    Performance 

Thirdly, some Providers fail in performance. One reason for this failure is their inability to arrange 100% cash deposit. Banks do not use their own money for issuing 100% cash-backed BG/SBLCs. It is the job of the Provider to search and find out such sponsors who are ready and willing to deposit 100% cash with the Top Issuing Bank.  

Banks compensate losses on the pattern of Insurance companies 

Top Banks are willing to take risk of loss for immediate payment of BG/SBLC face value money on demand from the client Bank. They can take such risk like an Insurance company. All insured properties are not expected to be destroyed by fire, earthquake or any other natural calamity. Rarely about 1% such incidents occur for the insurance company to pay compensations. They can cover up such losses from the insurance fee income of remaining 99% of properties.  

Similarly, rarely any such demand comes from the client bank. Usually banks approve loans against BG/SBLCs against such Projects which are found feasible in the eyes of the lending client bank as a result of their own market research, It would be failure of the lending client bank, if it has to turn to the Issuing Bank demanding cash against its BG/SBLC to compensate its loss in lending to a weak and non-feasible Project of their client. 

Providers have to find, arrange and deposit 100% cash with the Issuing Banks 

I know such Providers who had good record of performance as long as they were salaried people in some big financial companies. But they failed when they became independent and started their own companies to function as Provider after their retirement from those big financial companies. The reason is that they could not find sponsors continuously to deposit 100% cash with the Issuing Banks to let them issue 100% cash-backed BG/SBLCs. I know some Providers who closed their offices, when their quota of cash-supplying sponsors came to an end. 

As mentioned earlier, Top Banks never use their own cash money for backing any BG/SBLC. They issue these documents only if any Provider arranges 100% cash deposit against each such issuance. It is because that a Top Bank’s reputation and integrity obligates it to be able to immediately compensate 100% cash to the client bank on its demand without any question or investigation. This is the meaning of BG. Top Issuing Bank should immediately remit 100% cash to the client bank, if it demands so in case it suffers loss on its loan against BG to any of its clients.

 

 

BG/SBLCs against Assets of our Provider 

In case of our Provider, he has billions of dollars as cash as well as gold deposits being one of the inheritors of late President Soekarno’s assets. Assets in other Top Banks are used when BGs of big amounts are required.  

Euro5B Deutsche Bank transaction was done and completed with the Korean businessman as proof. This deal was done in 2015 using provider gold assets in Deutsche Bank Frankfurt not Barclays as Provider has assets in most top banks worldwide. This EUR5B was used for trade program and money markets investment by the Korean and the BG already expired in dec 2015 and now the asset can be used again. 

Now he is using the assets in Barclays only to provide 100% cash to the Issuing Bank, Barclays, for letting it issue BG/SBLC to his clients. As soon as Barclays issues any MT760 to any of his client, it debits BG cost to his Account first.  

Therefore, our Provider cannot fail in performance. He is not in need of any sponsors to arrange 100% cash to deposit in any Issuing bank. He has already several Billions of dollars as deposits in advance.in different Top Issuing Banks. He can perform for whatever face value amount of BG/SBLC any client requires.