Bank Guarantee

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:

• Guarantee Application, Promissory Note ( Our Guarantee team shall guide you on this)
• All the legal documents regarding firm registration 
• Tax Clearance/ Tax payment certificate 
• Board Minute mentioning to bear all the responsibilities of claim by our applicant ( in case of   third party guarantees and Joint Venture Agreement Guarantees)
• Self-declaration of not having loan/ no overdue with other bank by the third  party ( if guarantee is issued  in third parties name)

WHY CHOOSE NBL FOR Guarantee?

• Application of guarantee can be received/submitted to/from any branch. 
• Upon the submission/fulfillment of required documents, we generally issue the guarantee on the same day. 
• Claim of guarantees are accepted from any branch of Nepal and the same shall be settled within 7 working days (subject to valid claim and compliance of regulatory requirements and bank policies)
• Chances of fake guarantees are very less as its authentication can be verified from our website.
• Large network of international correspondent banks which makes easier to issue Counter guarantees.
• Advisory services as per the client requirements with our experienced trade finance team.
• Highly dedicated, skilled and experienced team with centralized department.
• Competitive rates and charges in banking industry of Nepal.

FAQs

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