Back-to-Back Credit

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Back-to-Back Credit

An agreement by a bank to guarantee payment by a seller made at the same time another bank guarantees performance by a buyer. Back-to-back credit is intended to reduce the risk of a transaction to a minimum. Back-to-back credit is also called countervailing credit or reciprocal credit. See also: Back-to-Back Letter of Credit.
References in periodicals archive ?
Global Banking News-September 21, 2017--Chile central bank revokes Venezuela reciprocal credit line
The Chile central bank said that it has revoked a reciprocal credit line with the Venezuelan central bank.
Global Banking News-April 19, 2011--Bangkok Bank, ICBC signs reciprocal credit facility(C)2011 ENPublishing - http://www.enpublishing.co.uk
Of these, seven require resident producers to complete a course in their resident state, while the remaining five allow resident producers to claim reciprocal credit for a course taken in another state.
If the state where the purchase occurred allows a reciprocal credit for both the state and local portion of the tax, then New York's credit is the sum of the state and local taxes paid by the buyer in the purchase state.
If the state where the purchase occurred allows a reciprocal credit only for New York's statewide tax, the use tax credit is limited to the New York State portion of the use tax obligation (not the local portion) and cannot exceed the amount of state tax the New York buyer paid in the purchase jurisdiction.
If the state where the purchase occurred allows a reciprocal credit only for New York's local taxes, then the New York credit is limited to the local share of the New York use tax and cannot exceed the local tax paid in the purchase state.
According to Publication 39, New York allows a reciprocal credit only for the state portion of any sales or use tax paid in Minnesota, and Minnesota taxes cannot be used to offset local New York obligations.
Exemption or credit is generally not granted if the first state does not have a sales or use tax or does not itself allow a reciprocal credit. One exception is Virginia, which allows a credit without requiring reciprocity (VR 630-10-29(A)).
Global Banking News-24 April 2009-Brazil, Argentina increase reciprocal credit limit(C)2009 ENPublishing - http://www.enpublishing.co.uk
Brazil and Argentina have decided to increase the limits for their reciprocal credit agreement to USD1.5bn from USD120m previously, Dow Jones has reported.
Reuters has reported that the Unico group of European cooperative banks are to provide a reciprocal credit line.