All You Need To Know About Bank Instruments
There are risks of failure or refusal of one of the parties to fulfill its obligations to other party during the partnership at local and international level. The bank guarantee is widely used all over the world as a reliable protection of other party from financial losses. PASHA Bank offers bank guarantee services for both domestic and international transactions. The Banks issues various bank guarantees both within its own capabilities and within the cooperation of the worldwide known 1st class banks.
The Bank’s professionals provide complete consulting support in information about bank guarantees and selection of bank guarantee type depending on the customer needs. A bank guarantee is a written instrument guaranteeing by bank to a party (seller / creditor / beneficiary) on behalf of his customer (buyer / debtor / principal), to effect payment on default of obligation against submittal of written demand or other documents specified in the guarantee.
Thus, if the customer defaults on the payment to other party or refuses to pay, the Bank will cover the loss at its own account. The International bank guarantee is a written instrument guaranteeing payment to a party abroad against the submittal of its written demand or other documents indicated in letter of guarantee.
• Customer (Buyer) is not required to make the advance payment in case of Purchase Owned BG, thus the funds are used better; • Purchaser gains reliable partner standing at local and international markets, advantages from various collaboration opportunities and it is able to demand more relevant conditions from partners; • Vendor is protected from arrears of Buyer on transaction and is able to perform prompt
• Bank guarantee requires less quantity of documents, no requirement for collateral and, as a result, the client gets the letter of assure within shorter time period and commission payment for services is also very low. 1. Guarantee of payment. This kind of guarantee is a security of payment obligations of Buyer to Seller. 2. Guarantees of advance transaction return. This guarantee signifies an obligation of the bank to come back advance transaction in the event that, after obtaining an enhance, the vendor does not perform its contractual obligations.
3. Contract execution guarantee. This particular guarantee is a security of timely delivery of goods or performance of services according to a contract. 4. Tender ensures. This guarantee plays a role of security in those cases when the Company fails to perform its obligations to soft organization or other celebration that is stipulated in the order received by winning the tender. 5. Guarantee in favor of the customs authorities. This particular guarantee is securities of obligation of the organization carrying out import and export functions to the Customs government bodies for payment of traditions taxes and duties.