Bank Guarantees & Shipping Guarantees
Letters of guarantee wherein the Bank promises to pay another party (beneficiary) in the event of default of its customer (applicant or principal) with regard to specified debt or obligation to the beneficiary. Guarantees may be issued at the request of our customers, own branches/HO or correspondents. Under this we would cover following types of Guarantees;
Bid Bonds: Bid bonds or Tender Bonds are guarantees issued by the banks undertaking to pay the beneficiary a said amount in the event of withdrawal of the tender or offer before its expiry date and/or in the event of contract not accepted by the tenderer after being awarded.
Performance Bonds: Performance bond is an undertaking to pay the beneficiary the guaranteed amount in the event the contractor (applicant) does not fulfill his contractual obligations. A reduction clause in such guarantees may stipulate that the guaranteed amount be automatically reduced in proportion to the value of the completed contract
Advance Payment Guarantees: Advance payment guarantees are issued to cover the advance payment on the contract. The reduction clause in the advance payment guarantee may stipulate that the guaranteed amount be automatically reduced in proportion to the value of the completed contract.
Retention Money Guarantees: Retention money guarantee is issued to cover the amount of retention money released by the beneficiary or in lieu of the amount to be retained by the beneficiary as per the contract.
Trade License Guarantee: Trade license guarantee is issued in favour of local authorities as security against issuance of trade license to the customer.
Shipping Guarantees: Shipping guarantees are issued favoring shipping companies at the request of customers in lieu of original documents (pending arrival of the documents or lost documents) against appropriate undertaking from the customer.
Delivery Orders: are issued to enable the release of goods to the importers where goods are shipped by air and consigned to the order of NIB. In this Product Program, Delivery Orders are treated as Shipping Guarantees unless otherwise stated.
