A Bank Guarantee is an undertaking/promise of an issuing bank to pay to the beneficiary if the applicant fails to perform the duties and obligation as per the contract between applicant and beneficiary. NBL issues all types of bank guarantee as per the requirement of our customers. The common types are as under:
1. Bid bond Guarantee: It secures the beneficiary (the party inviting the tender) in the event of the withdrawal or modification of the bid before its expiry date or if the bidder refuses to sign the contract or fails to provide further guarantees after bid is awarded to him/her.
2. Performance Guarantee: This is generally asked by the beneficiary to safeguard the performance/ task as per contracts assigned to the applicant. In general, if the applicant fails to perform the task (such as completing the task within specified date, cost and quality) assigned by the beneficiary as per contract, the beneficiary can claim to the issuing bank within the expiry date for the guaranteed amount.
3. Advance Payment: Some contracts require advance payments in certain percentage to be made to the applicant (who receives contract to perform task) when the contract is awarded to him/her. In such case, the beneficiary (one who provides task to perform) may seek an advance payment guarantee from the bank with an undertaking to pay the guaranteed sum to the beneficiary if the applicant has failed to comply with the terms and conditions of the contract.
4. Counter Guarantee: Generally used to enter a contract in project of Nepal by foreign bidders. Our bank has wider relationships with foreign banks from where we obtain counter guarantees and in turn will issue a guarantee on behalf of the foreign party to the beneficiary.
5. Payment Guarantee/Suppliers Credit Guarantee: Generally used in import of goods, dealership agreements and credit purchases from the suppliers. If the party (the applicant) receiving the goods in credit fails to pay the required amount, the beneficiary can claim to the bank through this type of guarantee.
6. Custom Guarantee: It is generally issued in favor of customs offices as security for payment of customs duties by an importer. A customs guarantee is an agreement to cover customs debt that has arisen, known as actual debt. It will arise from certain customs special procedures, known as potential debt
Documents required for issuing Guarantee:
Following documents are required for guarantee issuance:
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