BANK

GUARANTEE

Bank guarantee is a form of security, in which the Bank acts upon your order, assuming an obligation to your counterparty (beneficiary of the guarantee) to pay a specific amount when your company defaults on its obligations. The guarantee stipulates the type and scope of the obligation and the terms and conditions that have to be fulfilled for the drawing on the guarantee. The product is also available within the line for bank guarantees and multi-product line. ​

THINGS TO NOTE

Buyer and Seller can do the payment and delivery of goods multiple times as long as the BG is valid.

This can be done up to the maximum value of the BG.

BENEFITS OF BG

  • The bank guarantee adds credit worthiness to both the applicant and the contract.
  • There is a risk reduction due to the bank’s assurance that they will cover the liabilities should the applicant default.
  • There is an increase in confidence in the transaction as a whole.
  • Banks generally charge low fees for guarantees, which is beneficial to even small-scale business.

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