Letters of Guarantee are issued to provide the beneficiary with security. EDBI issues any type of bank guarantees requested by applicants and undertakes the responsibility for applicant's failure in fulfillment of an obligation, or payment of a debt.
Letters of Guarantee are issued to provide the beneficiary with security. EDBI issues any type of bank guarantees requested by applicants and undertakes the responsibility for applicant's failure in fulfillment of an obligation, or payment of a debt. Among types of letters of guarantee issued by this bank, the three most important ones are as follows:
- TENDER GUARANTEE (BID BOND): This type of guarantee is issued to prevent the applicant from refusing to accept the awarded contract.
- PERFORMANCE GUARANTEE: Performance guarantees are designated to ensure goods are delivered, or services are rendered in accordance with the terms mentioned in the contract, and at the due time whether the contract is properly performed or not.
- ADVANCE PAYMENT GUARANTEE: This kind of guarantee is issued to ensure the beneficiary that an advance payment is properly used in accordance with the terms of contract concluded between the two parts.