Bank Guarantee

    Bank Guarantee is handled by Foreign Trade Department, Corporate Office, Tangal which is the central processing unit. All the branches of KBL will accept Guarantee Application and forward the request to Foreign Trade Department.  

    Types of Bank Guarantee:

    Bid  Bond

    This  is  also  commonly  called  as  a  Tender  Bond  or  Earnest  Money  Guarantee. A  bond submitted  by  the  applicant  as  security  for  accepting  a contract  on  offer  by  the  beneficiary  is  a  Bid  Bond.

    Performance  Bond

    A  guarantee  obtained  or  submitted  to  ensure  goods  are  supplied  and  delivered  on  time, or services  are  rendered  within  the  stipulated  time within the realms of contract  is  known  as  a  Performance  Bond.

    Advance  Payment  Guarantee (APG)

    The  main  objective of an  APG  is  to  enable  the  contractor  to  obtain  necessary  funds  from  the  beneficiary  to  make  preparation  for  performance  of  the  contract. The  funds  so  obtained  may  be  used  for  purchasing  machinery, materials, or  for  hiring  laborers  etc.

    Counter Guarantee (CG)

    Also known as International guarantee.

    A request along with an indemnity by a bank to another bank to issue a guarantee favouring the beneficiary on behalf of its customer (the Principal) with a commitment to pay upon receipt of claim from the issuing bank.

    NRB guidelines on Bank Guarantee

    • Bank Guarantee can be issued in Foreign  Currency including INR
    • Only for Business in foreign land, export and for receiving advance payment. 
    • Registered travel agency of Nepal to acquire ticketing license of Foreign Airlines.
    • Inform NRB of Guarantee issuance and claims for Foreign Currency.
    • Settlement/Finalize within 7 working days of claim.
    • Guarantee can be issued in Nepal in FCY only in the case of Global Tender. Counter Guarantee should be received in FCY from Foreign Bank. This facility is for Foreign Bidders who are eligible to participate in Global Tender process.
    • Foreign Bidders cannot participate in National Level Bid. Guarantee and LC issuance is not permitted in this case.