Introduction:
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.
