According to IFRS 9,  guarantees and letters of credit are classified as contingent liabilities. Contingent liabilities are off – balance sheet items and appear as memorandum items to determine the sundry assets or liabilities. When any of our bank issues a bank guarantee such as a performance bond, the bank does a provision for it in their books as a protective mechanism in the event that the facility crystallizes.  Since we do not ask clients to put in 100% cash margin, it is now industry practice for the bank to provision for bad debt in the event the facility crystallizes in the future. We are different in the sense that if our client agrees to put in 100%, we can secure a fixed deposit arrangement that is interest earnings subject to other terms and conditions to be discussed with the client. Therefore unless the client places 100% cash margin, there is no interest that will be earned.