The Bank Guarantee is an irrevocable written undertaking of the issuing bank (the guarantor), issued for account of the applicant and in favor of the beneficiary, to pay to the beneficiary any amount up to the maximum amount specified in the guarantee, upon receipt of a complying written demand for payment from the beneficiary, in case of non-fulfillment from the applicant of contractual obligations that are subject to the guarantee.
Bank Guarantees are subject to Uniform Rules for Demand Guarantees (URDG, Publication No. 758 of ICC which has replaced the previous version of these rules URDG Publication No. 458. However usage of URDG 458 is not prohibited and it can be used at any case provided that the Applicant and the Beneficiary agree to use this set of rules.
What do we offer to our Corporate and SE customers?
1.Issuance of different types of direct Bank Guarantees in favor of beneficiaries within and outside Albania including:
Payment Guarantee – is issued for account of the applicant to assure payment of goods and services in favor of the beneficiary
Advance Payment Guarantee – is issued for account of the applicant to assure usage of the advance payment amount in accordance with the contract
Bid Guarantee - is issued for account of the applicant that participates in a Bid
Performance Guarantee - is issued for account of the applicant to assure fulfillment of contractual obligations
2.Issuance of different types of indirect Bank Guarantees – these guarantees are issued by the bank in favor of its customers, at the request of a correspondent bank (applicant’s bank) for account of a customer of this correspondent bank, under its full responsibility and against its counter-guarantee.
3. Wording of guarantee texts
Our texts are tailored to your business. Upon your request, we will support you as early as during the contract negotiations, which could result in additional benefits for you or your customers.
4. Advising of guarantees
We forward to you guarantees issued by other banks in your favor – the guarantee texts are checked by our specialists for any conditions that may be disadvantageous to you. In case you need to submit a payment demand under a guarantee advised by us, we are pleased to support you.
- The Bank Guarantee comprises a security for the beneficiary to assure him that he will be compensated for any loss/ damage upon presentation by his side of a complying demand for payment to the issuing bank
- The Bank Guarantee creates the possibility that the buyer is awarded more favorable credit terms from the Seller
What parties should take note?
The Bank Guarantee is independent of the underlying relationship between the parties and the bank cannot withdraw from its undertaking as guarantor, irrespective of any disputes arising between the parties.
Depending on the required type of the guarantee, the customers of Raiffeisen Bank sha should deposit a scanned copy of the contract signed by either parties or a different document to justify the agreement between the parties and the object of the required guarantee.
Bank Guarantees are issued against cash collateral provided by the applicant or by applying for a credit facility at our bank.
- Stand By Letter Of Credit
Stand By Letter Of Credit is a specific type of Bank Guarantees, but it differs from guarantees because Stand By LCs are subject to Uniform Rules for Customs and Practice for Documentary Credits (ICC publications no.600) unlike Bank Guarantees which are subject to Uniform Rules for Demand Guarantees (URDG, Publication No. 758).