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A Bank Letter of Comfort is commonly used in Indian business transactions where a formal guarantee is either not required or not preferred, but some form of assurance is needed regarding a company's financial standing or capabilities. This document is particularly relevant in scenarios involving international trade, project financing, or significant business transactions where the beneficiary seeks comfort about the financial stability of their business partner. While not as binding as a bank guarantee, the Letter of Comfort carries significant weight due to the reputation of the issuing bank and is governed by Indian banking regulations, particularly the Banking Regulation Act, 1949, and RBI guidelines. The document typically outlines the bank's relationship with the primary obligor, the scope of comfort provided, and any specific limitations, serving as a middle-ground instrument between a reference letter and a guarantee.

1. Bank Details and Letterhead: Official letterhead with bank's name, branch, and contact details

2. Date and Reference Number: Specific date of issuance and unique reference number for the LoC

3. Addressee Details: Full name and address of the beneficiary receiving the Letter of Comfort

4. Subject Line: Clear identification of the document as a Letter of Comfort and reference to the primary obligor

5. Primary Obligor Information: Details of the entity for whom the Letter of Comfort is being issued, including their relationship with the bank

6. Purpose Statement: Specific purpose for which the Letter of Comfort is being issued

7. Scope of Comfort: Clear statement of the nature and extent of comfort being provided by the bank

8. Disclaimer and Limitations: Express statements clarifying that this is not a guarantee and specifying any limitations of the bank's commitment

9. Validity Period: Clear specification of the time period for which the Letter of Comfort remains valid

10. Authorized Signatory: Signature block with name and designation of the authorized bank official