This is a written promise/irrevocable obligations by the Bank to compensate (pay a sum of money) to the beneficiary in the event that the obligor (Applicant) fails to honor his/her/its obligations in accordance with the terms and conditions of the guarantee/agreement/contract. The Bank may extend a one-time or renewable Letter of Guarantee Facilities. The Bank provides guarantee services to both local and foreign customers.
Types of Letters of Guarantee includes the following:
a. Bid Bond Guarantee
Guarantees issued by the Bank in favors of a designated beneficiary upon the request of the bidder, representing the commitment of the Bank to meet the claims that may be made by the beneficiary in the event that the bidder who purchased the guarantee from the Bank withdraws from the bid during the bid period or fails to accept the award when he/she/it becomes the winner.
b. Performance Bond Guarantee
A type of guarantee that the Bank issues in favor of a bid organizer (beneficiary) at the request of the bid winner to meet any claims to be made by the beneficiary, in case the bid winner fails to deliver the goods or to perform the services in accordance with the terms and conditions of the contract.
c. Advance Payment Guarantee
A guarantee issued in favor of the beneficiary/buyer who makes the advance, up on the requests of the seller/contractor who received the advance, representing a commitment on the part of the bank to repay the sum, in case the seller or contractor fails to supply the good or service to the beneficiary according to the contractual conditions, and refuses to return the money to the beneficiary.
d. Suppliers’ Credit Guarantee
A Guarantee issued by the Bank to provide security to a local or foreign supplier/beneficiary on behalf of a local customer (debtor), representing a commitment on the part of the Bank to meet any claims to be made by the beneficiary, in case the debtor (local buyer) fails to repay in accordance with the terms and conditions of the contract.
e. Retention Bond Guarantee
A Guarantee issued by the Bank in favor of the party accepting to release the retention (beneficiary), upon the request of a seller or contractor, to provide security to a beneficiary, in the event that the seller or the contractor fails to perform his/her/its obligation as per the terms and conditions of the contract.
f. Customs Duty Guarantee
A Guarantee issued by the Bank in favor of the Customs authority (the beneficiary) to meet the requests of the beneficiary in respect of customs duties in circumstances where the goods imported without payment of customs duties are not re-exported and the respective customs duties have not been paid.