BANK GUARANTEES
A bank guarantee is a form of loan that is less expensive than a cash loan. In this situation, however, banks charge a particular commission fee, which is typically a percentage of the transaction amount. Not only are bank guarantees beneficial and helpful to company owners, but they are also beneficial and helpful to banks.
Business partners’ uses bank guarantee in order to make sure the safety of the negotiated transactions in the business. In agreement with these document bank accepts a responsibility to pay a listed amount of money to the client in case the contractor fails to accomplish the terms of the contract.
The service of a bank guarantee in UAE is attractive because it decreases possible risks of transactions and make sure the full discharge of responsibilities specified in the contract.
Bank Guarantee under UAE cannot be for an undefined amount and it should also consists of a fixed amount for which the Guarantee is being provided.
Types of Guarantees:
1. Advance Payment Guarantees
This type of guarantee ensures refund of the advance payment in case the terms of the transaction are not fulfilled in relation to time & volume
2. Performance Guarantees
This type of guarantee serves a guarantee for all the type of services, tasks or delivery of goods that is performed in full and also in time.
3. Tender Guarantee (Tender Bond)
This type ensures fulfilment of payment requirements in case the succeeding tenderer refuses cooperation like cancels application, does not sign a contract, etc.
4. Secured & Unsecured Guarantee
Moreover, bank guarantees can also be unsecured and secured. If there is a written commitment then the guarantee is unsecured. If there is any other way of ensuring such as pledging of a property then the bank guarantee is considered as secured.
Elite Banking Consultancy has a knowledgeable team that can assist you to experience hassle- free facilities on best terms and conditions.