Financial Business Service
International Services
Financial Guarantees (BOND)
Financial Guarantees facilitate commercial and / or contractual transactions with foreign countries, the guarantor undertakes on behalf of his exporting client or importer and for a specified period of time to pay at first request, unconditionally and irrevocably, an amount to a foreign company or beneficiary upon receipt by the latter of a declaration of default contractual (request for enforcement), sometimes accompanied by one or more supporting documents.
Are independent international guarantees or are released from the underlying contract between the ordering customer and the foreign counterparty beneficiary of the guarantee, verbatim edenforceable on first request.
Letter of Credit
The letter of credit is a document, issued by a credit institution, which acts at the same time as a guarantee so that a subject can obtain a loan from other subjects, which may be banks or suppliers, and as a deferred payment method.
​It is often used in export and import operations (documentary credit) when the buyer makes a certain sum available to the seller for the supply of goods and services; sum that the seller will receive only under certain conditions previously agreed and which the bank guarantees to check.
Standby letter of Credit
The standby letter credit is an unilateral payment promise and is intended to be used as a guarantee for the correct execution of a commercial contract.
It is a documentary credit, its use is subject to an extremely simplified presentation of documents or even limited to the mere presentation of the payment request by the beneficiary.
SBLC, due to its practicality and flexibility, is widely used not only in international trade but also as a guarantee in transactions of an exclusively financial nature, for example it can be used as collateral on a credit line granted by a bank.
Bank Guarantee
Bank guarantee is a guarantee issued by a bank or a financial institute to reduce risks in transactions for both parties involved in the transactions in case of a contract breach.
In an event of a contractual obligation of the seller/exporter or a payment obligation to the seller/importer, the bank or the financial institute guarantees to indemnify the recipient against the contractual obligations of the exporter or the importer. With this, the risk factor will be reduced drastically for both parties in a contractual agreement while encouraging the transaction to proceed effectively.
Advance paymet guarantees
An advance payment guarantee secures refund of advance payments against default by the supplier or the contractor. It’s an on-demand bond, where the bondsman is bind to pay the amount of money set out in the bond immediately on demand, without having to meet any preconditions in the contract.
Thus this is a bond that should be draft very carefully to set out the circumstances.
An Advance payment guarantee expires when the contract is fulfilled and are commonly used in construction projects and in industrial supplies.
Performance Guarantee
Performance guarantee is an assurance issued by a financial institute for meeting all the performance terms and conditions of the contract by the contractor. With this, the client gets better security to guarantee job completion. If the contractor fails to perform all their obligations under the contract, compensation is guaranteed for the client for their monetary losses.
Performance guarantees are mostly used in the construction industry between contractors and clients and it’s a mandatory financial instrument for government projects.
Tender Guarantee
The tender guarantee, also known as a tender bond or bid bond is a written document issued by Bank at the request of the tenderee during the tender process for bids of a construction or procurement of a
a project giving assurance of their performance guarantee. With a tender guarantee the bank undertakes to pay the beneficiary a certain amount of money if the tenderer withdraws or amend his bid during the validity period of the bid or refuses to comply with the terms of the contract.
Bank Draft
A bank draft is a payment instrument that guarantees the funds by your financial institution.
It also is known as a banker’s cheque. In simple terms obtaining a bank draft is similar to asking your bank to write a cheque for you. The draft will enable you to make payments without having to withdraw money from your account. Here the bank will transfer the amount to an account of the bank issuing you the bank draft which the receiver of the money can use to collect money with. With this, the receiver won’t experience check bounces due to lack of funds in the account.
Documentary Letter of Credit
Documentary Letter of Credit is an assurance provided by a bank or trade finance institutions to ensure the importer/buyer, that they receive the goods under the terms and conditions as initially set out and payment to the supplier as pre-agreed. It is ideal for meeting short-term needs and for new business relationships. The bank or the financial institution will act as an intermediator ensuring both parties terms specified in the DLC are completely fulfilled to receive the payment. In an event of when the buyer is unable to pay after the terms specified in the DLC are fulfilled, seller/exporter can make a compliant document presentation demanding payment, to which the bank or financial institution is obligated to pay.
Account
At FBS , we offer a range of account services for fast and safe money transfers across the globe.
Our account services include
• Bank accounts
• Remittance
• Prepaid card / Charge card accounts
