JAIIB LRAB Unit 13 - Deferred Payment Guarantee

Deferred Payment: Payment by installments of the price of goods or service without interest.

Deferred Payment Guarantee: A is an unconditional and irrevocable guarantee issued by the bank assuring payment in installments and interest on due dates. DPGs are usually insisted upon when capital goods are imported and seller/exporter requires an additional assurance that the instalment payment allowed by him to the buyer/importer is met.