Select Page

International [Foreign] Guarantee

Bond or payment undertaking given in writing by the Bank at the request or on the instruction of a customer and under liability or a principal to discharge an obligation otherwise to compensate as per the terms and conditions.

Product Features

Repayment Guarantee: The purpose of such guarantee is to ensure the beneficiary of the guarantee for repayment or compensation of an amount advanced to the principal. The repayment may be expected at a certain date and at one go or at different dates on installment basis. Such guarantee will cover the total value of the advanced amount to the principal of the guarantee plus interest in almost all cases.
Advance Payment Guarantee: When a supplier or contractor requires advance payment from employer to supply commodities or to perform other obligation(s), the latter (to be beneficiary of the guarantee) may require an advance payment guarantee to protect non-performance of obligation from the side of the former (to be principal of a guarantee). Such guarantee will cover, in almost all the cases, the total value of the advanced amount to the principal of the guarantee for refund to beneficiary of the guarantee.
Bid Bond (Guarantee): An individual or a firm who participates in a bid may be requested to present a bid bond for enforcement of signing the major contract up on winning the bid or to compensate the bidder upon failing to do so. This kind of guarantee will cover a certain percentage
of the bid amount e.g. 10% (which will be returned to participator of the bid in the case of failure to win the bid).
Performance Guarantee: The principal in such guarantee will undertake to perform an obligation to the beneficiary. If the principal fails to discharge obligation, the beneficiary will be entitled to claim the guarantee amount to cover loss or damage sustained due to such failure, which may be a certain percentage of the main contract value between the two parties. There is a possibility that such guarantee may cover even the full contract value.