Form Of Bank Guarantee
Bank guarantee means any signed undertaking, however named or described, providing for payment on presentation of a complying demand. MT 760 is a swift message type that is used by issuing banks when issuing a guarantee or a standby letter of credit.
Various types of guarantees are issued by the banks on behalf of their customers. Bank Guarantees (BG) is also known as Letter of Guarantees which can be broadly classified as (i) Financial Guarantees and (ii) Performance guarantees. Earnest money Deposit guarantee or Bid Bond Guarantee, Guarantee for Payment of Customs duty (specific or continuing), Advance Payment Guarantee (APG), Deferred Payment Guarantee (DPG), Shipping Guarantee, Performance guarantee, Retention Money guarantees etc are some of the prominent types of guarantees issued by the banks.Bank Guarantee or letter of guarantee is a fee-based credit facility extended by the banks to their customers. The non-fund based facilities are the letter of guarantee or letter of credit by the banks wherein banks get fee income and Since there is no immediate outflow of funds from the banks they are also known as the non-fund based facility.
I have already explained the different kinds of financial guarantees.The performance guarantees are issued in respect of supply of equipment as well as contract.The supplier of equipment may require to submit performance guarantee from a bank with regard to turnkey requirements, project standard and specification, and on Operability test of equipment(i.e. The system operating at the capacity as defined in the contract for a continuous.months/years etc.), preventive measure, warranty period etc.
Performance Bond In The Form Of Bank Guarantee
No lien letter is an undertaking from the premises owners (in the case of rented premises) that he does not have a lien on goods hypothecated to the bank which is stored in his premises rented out to the borrower, towards his dues like rent receivable etc.click the following link to different kind of liens2.Arrears of cumulative dividends, Gratuity liability not- provided for, Disputed excise/customs /tax liabilities, Pending lawsuit (possibility of liability arises only on court judgment), and other liabilities not provided for are the examples of contingent liabilities.
A Bank Guarantee will be drafted within strict and standard confines. When issued by SWIFT, the Bank Guarantee will contain fixed fields, each field is numbered and contains a specific item of data, such as date, expiry date, amount, etc.When the Bank issues a Bank Guarantee, it will generally send it also in original form to the Beneficiary Bank by post of courier.
Form 6c Bank Guarantee
It will take the form of a letter.It will not look like a colourful certificate and will not contain fancy wax seals! It will more than often look like a modest document printed on standard bank notepaper and signed off by an authorised officer of the bank.