Guarantee (German: garantie) is a payment or performance security. By issuing a guarantee, the bank undertakes to pay the amount stated in the guarantee to the guarantee beneficiary at first call and against the statement that the other party failed to perform its contractual obligation.
Upon the customer’s order, Erste Bank a.d. Novi Sad issues all types of guarantees (performance bond, bid bond, guarantee for securing the payment under a loan transaction, advance payment refund guarantee, counter guarantees ..) in accordance with the customer’s instructions. By contracting a bank guarantee, the importer may agree in an easier and more favourable manner on deferred payment and imports financing.
Advice on the guarantee details in concluding a sales agreement:
- We advise you to specify in the sales agreement the necessary details and terms regarding the contents of the bank guarantee: guarantee validity period, guarantee amount, who bears foreign expenses, application of rules, deferred payment period, documents required to be presented in the event of request for payment under the guarantee, application of laws, court and other.
- Nostro guarantees – issued by domestic banks upon the request of their customers to foreign partners
- Vostro guarantees – issued by foreign banks upon the request of foreign partners in favour of the customers of domestic banks
As regards vostro guarantees, Erste Bank a.d. Novi Sad provides the following services to its customers:
- Advisory services when agreeing on a guarantee clause
- Advising the received guarantee under the instructions of the bank guarantor
- Consulting services concerning the correctness of contents of a vostro guarantee
- Authentication of a guarantee issued on paper and delivered to the customer outside the banking channels
- Preparation of request for collection under a guarantee
- Performance guarantees (bid bonds, performance bonds, advance refund guarantees...) and payment guarantees – the basic criterion is classification according to the nature of obligation from the underlying agreement whose execution is guaranteed by the bank
- Counter guarantee – a guarantee of one bank issued as security in favour of another bank with a request for that other bank to issue a guarantee to the beneficiary
- Super-guarantee – a guarantee issued by the bank at the request of another bank. By issuing a super-guarantee, the bank super-guarantor guarantees that the above mentioned other bank will perform the obligations under its guarantee. The guarantee and super-guarantee beneficiary may send a collection request to both banks and thus the bank super-guarantor and the bank guarantor have joint and several liability toward the guarantee beneficiary.