Zoom puts banks in Rs2,650 cr hole

Very good case of Bank Gurantees & Stand by Letter of credit

As many as 26 banks have been hit hard by the firm’s delinquency; corporate debt recast close to being finalized

Foreign banks as well as overseas branches of Indian banks insisted on stand-by letters of credit (SBLCs) from Indian banks in lieu of guarantees. An SBLC gets operationalized when the party concerned fails to pay. In this case, the aggregators started invoking guarantees given by Indian banks through SBLCs when the money flow dried up.