LIE its full form in banking is the Lender’s Independent Engineer’s. Now, let’s discuss the reason why this is crucial in banking, particularly in the case of big-time loans for large-scale projects. Consider the time when banks shell out huge sums of money for things like power plants being constructed large bridges, massive power plants or even industrial structures. These aren’t just little investments. We’re talking about huge sums of cash and very long-term projects. The risk is there into. Big projects mean big risks. To manage these risks like professional, banks and finance companies are able to pull the LIE. What precisely is the LIE thing that banks use to protect themselves? It’s an expert in engineering who is an independent person or company, completely distinct from the bank as well as the project. Their main task is To look over the technical aspects that are involved in the venture. They make sure that everything runs in accordance with the plans that the bank ratified in order to loan the money.
What else should you Be Aware of LIE?
Let’s imagine an organization wants to begin a major infrastructure project, and is in need of money. The bank responds, “Alright, but let’s obtain an LIE to have a look at the project first.” Prior to the time that the lender open their wallet and the LIE goes into the in-depth and determines whether the plan for the project is logical as well as if the plan is sound and the construction schedule is on budget and the rest of it. This is similar to the bank’s safety inspection to determine whether the project is likely to be completed in time and earn enough cash to repay the loan.
