A letter of guarantee is a written commitment from the bank to pay the value of the letter of guarantee to the payee upon the latters first request regardless of any claims on the part of the client during the term of validity of the letter of guarantee, and in accordance with the letter of guarantee terms & conditions.
Types of letters of guarantee:
Internal letters of guarantee:
- A preliminary letter of guarantee issued for clients to guarantee their seriousness in participating in tenders.
- Final letter of guarantee issued for clients to guarantee seriousness of works done.
- Letter of guarantee for a down payment in return for the down payment given by the beneficiary party especially in huge contracting works. Such a letter of guarantee is issued under the condition that the letter of guarantee is not valid until the down payment cheque/amount is submitted to the bank and is collected.
external letters of guarantee:
- The external Letters of guarantee are issued for customers inside the country for beneficiaries outside country upon banking arrangements and agreements with our correspondents.