A letter of guarantee is a written pledge from a bank, upon the customer's request, to pay the value of the letter of guarantee to the beneficiary upon their first request, without regard to any conflict of interest from the customer during the validity period of the letter of guarantee, and in accordance with the terms and conditions of the letter of guarantee.
Types of Letters of Guarantee:
Local Letters of Guarantee:
- A preliminary letter of guarantee is issued to clients to ensure their seriousness in bidding.
- A final or advance payment letter of guarantee is issued to clients to ensure the seriousness of the work and its validity for the client.
- An advance payment letter of guarantee is issued with or without conditions. A conditional letter of guarantee is not effective until the advance payment check is received by the bank, collected, and notified.
External Letters of Guarantee:
These are issued based on requests from the bank's clients and on behalf of beneficiaries abroad, based on banking arrangements and agreements with our correspondents abroad.
