Bank Guarantee and Counter Guarantee

Product Name

Bank Guarantee and Counter Guarantee

Introduction

Bank of China (Thai) Public Company Limited (BOCT) provides bank guarantee and counter guarantee services to ensure that beneficiaries receive compensation if their customer fails to meet their contractual obligations.

Letter of Guarantee issuance Is a financial service provided by banks to assure a beneficiary that they will receive compensation if their customer fails to meet their contractual obligations. It's a promise from the bank to pay a specified amount to beneficiary if the applicant fails to perform or deliver per committed or within the time period and is typically used to guarantee payment or performance in a contract.

Features:

Type of Guarantee

Purpose of Guarantee

Bid Bond

To support the Supplier/Contractor bidding on a Project or Contract and assure the Buyer or Employer that the Supplier/Contractor will complete the bid conditions. 

Performance Bond

To assure the Buyer or the Employer to support the completion of Contract or Project or to cover Warranty period etc.

Advance Payment Guarantee

To assure the Advance Payment made will be returned if the Supplier defaults under the Contract. 

Counter Guarantee

To support issuance of a separate guarantee or Standby LC or other such undertaking by the beneficiary of the Counter guarantee. Mainly issued by a Bank in one Country to request a Bank in another country to issue their local undertaking.

Payment Guarantee

To assure timely invoice payment.

Deposit Guarantee

To substitute for cash security deposit, which may be required

a) in a purchasing process;

b) in the course of a rental agreement to ensure the property owner against default by the tenant;

c) for the cost of repair in relation to any damage explicitly specified in the lease and that did in fact occur;

d) by Governmental Agencies e.g. Tax office or VAT office or Customs authority etc., or

e) in other situation as appropriate. 

Customs Guarantee

Issued to the customs to guarantee that the applicant will fulfill the obligation of paying customs duties.

Warranty Guarantee / Retention Guarantee

Issued to the owner or buyer to guarantee the applicant will continue to fulfill contract obligation (such like maintenance & repair) after withdrawing final payment of the contract price in advance.

Financing Guarantee

To ensure the repayment of principal and/or interest on loans, bonds, or commercial paper, etc. 

Our services are suitable for

Customer that needs to provide a guarantee of payment or performance to a third party.

Process

  1. The applicant should fill out an application form or a contract to apply for a letter of guarantee, indicating the type and amount of guarantee required.
  2. The applicant needs to pay fees, as required by BOCT. The amount of fees depends on the type and amount of guarantee requested.
  3. The applicant must submit the primary documents related to the contract as underlying. These documents help the bank understand the nature of the guarantee and assess the associated risks.
  4. In addition to the primary documents, the bank may require the applicant to submit other documents, such as an application form and a letter of confirmation (if not in the bank's format) or a letter of indemnity (for retrospective L/Gs backdated in our format).
  5. After receiving all the original documents and collect fees, BOCT issues the letter of guarantee to the beneficiary specified in the application form or contract. The letter of guarantee will contain the terms and conditions of the guarantee, including the amount, the expiry date, and the events that would trigger payment under the guarantee.

Required Documents

  1. Application form
  2. Contract
  3. Underlying
  4. Letter of confirmation (not using the bank's format)
  5. Letter of Indemnity (for retrospective L/Gs backdate our format).