TDBL issues following types of Bank Guarantees :
1. Bid Bond
Bid Bond is issued on behalf of the customer in order to participate in Tender Bid, therefore, it is also known as Tender Guarantee. The Guarantee is usually given for 2.5% to 5% of the total contract value depending upon the beneficiary’s demand.
2. Performance Bond
Performance Bond is normally issued on behalf of the customer in order to perform debt, duty and service as per the terms of contract awarded through the Tender Guarantee. The Guarantee is usually given for 5% to 10% of the total contract value depending upon the beneficiary’s demand.
3. Advance Payment
Advance Payment is issued on behalf of the customer in order to obtain mobilization fund as per the contract terms, therefore it is also known as Mobilization Bond.
4. Financial Bank Guarantee
Financial Bank Guarantee is issued on behalf of the customer in order to obtain supply in credit and to obtain loan from any other banks/financial institutions/agencies etc.
5. Other Bank Guarantee
- Security for retention money under a contract
- Deposit for tax; custom, VAT and other payable to government agencies as government revenue
Deposit to obtain agency license and /or to be nominated as agent, dealer etc.
Security for repatriation on air ticket stock
Shipping companies for release of goods in absence of the original bills of lading/shipping documents.
- Overseas buyers
Guarantee Application Form
Bank Guarantee Application normally contains following information which should be filled up by customer.
- Name and Address of Applicant
- Name and Address of beneficiary
Amount of Guarantee
Validity of Guarantee
Guarantee to be issued on
Details of particulars
Details of enclosed documents
- Authorization to debit the customer’s nominated account
- Account Number
Settlement of Bank Guarantee
1. Up on Expiry:
Bank Guarantee is issued for the specified time period, hence if the bank does not receive any claim within the validity period, the existence of Bank Guarantee will automatically come to an end and bank will be no more liable for the terms of Guarantee. But in case the Guarantee is issued in favor of custom office, the Guarantee cannot be simply released even upon its expiry until release letter from custom office is received.
2. Up on Submission of release letter:
Bank Guarantee is normally issued on behalf of the customer in order to perform duty as per the terms of contract, hence once the duty is over, the beneficiary will send the letter to the bank requesting for the release the liability.
3. Up on receipt of the claim:
If the contract is not performed, as per the terms of guarantee, the beneficiary will claim the amount as guaranteed by the bank. In this situation, condition of the Guarantee should be thoroughly checked and honor the claim immediately by way of creating a forced loan in case of insufficient balance. If the Guarantee was issues to be payable upon the first demand of the claim otherwise specific justification of the claim to be demanded. However, client should be informed about the invocation immediately before the claim is honored.
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