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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 kafalah: The purpose of such kafalah is to ensure the beneficiary of the kafalah 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 kafalah will cover the total value of the advanced amount to the principal of the kafalah plus interest in almost all cases.
Advance Payment kafalah: 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 kafalah) may require an advance payment kafalah to protect non-performance of obligation from the side of the former (to be principal of a kafalah). Such kafalah will cover, in almost all the cases, the total value of the advanced amount to the principal of the kafalah for refund to beneficiary of the kafalah.
Bid Bond (kafalah): 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 kafalah 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 kafalah: The principal in such kafalah will undertake to perform an obligation to the beneficiary. If the principal fails to discharge obligation, the beneficiary will be entitled to claim the kafalah 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 kafalah may cover even the full contract value.