Though standby letters of credit have similarities with commercial letters of credit and other financial instrument, there are significant differences in scope and practice.
A new set of Rules was therefore required for this workhorse of commerce and finance and ISP 98 fills this important gap in the market place. ISP98 reflects a distillation of practices from a wide range of standby users: bankers, merchants, rating agencies, corporate treasurers, credit managers, government officials and banking regulators.
Like the UCP for commercial credits, ISP98 is destined to become the industry standard for the use of standbys in international transactions. Another set of invaluable ICC rules, ISP98 offers a precise and detailed framework for practitioners dealing with standby letters of credit.