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info@example.com A bank guarantee is the bank’s obligation to pay the beneficiary of the guarantee the amount specified in the letter of guarantee, if the guaranteed obligation is not fulfilled. The bank provides only financial security in a guarantee transaction – if contractual obligations are not met, the beneficiary of the guarantee will receive its money, but the bank will not interfere with the execution of the agreement as bank guarantee is not legally bound by the purchase and sale agreement.
The claims submitted under a letter of guarantee are paid by the bank on the beneficiary's request without requiring proof of the violation. Apart from minimizing the risk of agreement unfulfillment, the service helps to improve mutual trust between business partners. We issue guarantees in accordance with the international rules URDG 758.
Types of guarantee
1. Tender guarantee (bid bond)
- The bank undertakes to pay the guarantee amount for contracting authority (organizer of procurement) if the tenderer withdraws their bid and/or will not enter a on the offered terms
2. Performance guarantee
- The bank undertakes to pay the guarantee amount for buyer of goods or services if seller fails to fulfil its obligations, e.g. to dispatch goods
3. Advance repayment guarantee
- The bank undertakes to pay the guarantee amount for buyer who makes advance payments for goods or services if seller defaults on delivery