Bank Guarantee
Bank Guarantee is handled by Trade Operations Department, Corporate Office, Tangal which is the Central Processing Unit. All the branches of KBL will accept Guarantee Application and forward the request to Trade Operations Department.
Issuance of Bank Guarantee
Please consult your nearest KBL Branch to issue Bank Guarantee. The Application forms can be downloaded from KBL website under Downloads:
Common Types of Bank Guarantee
Bid Bond
These are the guarantees issued by the Bank on behalf of the party willing to participate in the tender called by the Beneficiary. This assures the Beneficiary that the person/party participating in the tender will not withdraw from the Bid before the expiry of the Bid/Tender and will sign the contract if the tender is awarded to him and will submit the performance guarantee if required so. This type of guarantee is also called “Tender” Guarantee.
Performance Bond
This type of Guarantees is issued by a bank to a beneficiary on behalf and at the request of its customer (Principal) to whom the contract is awarded by the beneficiary in order to underwrite the contractor’s obligations to complete the project as per the agreement. Such guarantee usually lasts for the contract period as specified by the beneficiary.
Advance Payment Guarantee
An advance payment guarantee is issued where a principal receives money in advance from a beneficiary in order to perform/finance the work as per contract. A bank issues advance payment guarantees to beneficiary on behalf and at the request of its customer (Principal). This type of guarantee is issued in order to protect the advance payment made by the beneficiary.
Supplier's Credit Guarantee
A supplier's credit guarantee is issued by a bank on behalf and at the request of the customer (Applicant) in order to supply the goods in credit by the Beneficiary to the applicant. The applicant sells the goods on behalf of the beneficiary and pays the value on a given date.
Counter Guarantee
It is a written undertaking by one bank (often called the instructing bank) to another bank (the guarantor bank), promising to reimburse the guarantor bank if it has to pay out under a guarantee it issues to a beneficiary. It acts as a back-up guarantee to support the primary guarantee. It is used when the beneficiary is in a different country and may not trust the principal’s bank. It helps mitigate risk and enhance credibility in cross-border transactions.