PASHA Bank Bank Guarantees can be used by large enterprises, as well as medium and small enterprises with annual turnover exceeding one million GEL, or with a potential to achieve this figure in the near future.
A Bank Guarantee is a written instrument issued by a bank to a party (beneficiary) on behalf of the customer (principal), stipulating payment by the bank to the beneficiary in case of default, against the submission of a written demand and/or other documents specified in the guarantee text. Bank Guarantees are widely used all over the world for the reliable protection of the other party from counterparty default risk.
PASHA Bank offers Bank Guarantees for both domestic and international transactions. The Bank issues various Bank Guarantees both within its own capabilities as well as in cooperation with international first-class banks.
PASHA Bank professionals provide complete consulting support with regard to information pertaining to Bank Guarantees, and the selection of the appropriate type of guarantee, depending on the customer’s needs. Thus, if the customer defaults on the payment to the other party, or refuses to pay, the Bank will cover the loss.
Main Types of Bank Guarantee
Payment Guarantee - This type of guarantee is a security of payment obligations of the Buyer to the Seller.
Advance Payment Guarantee - This guarantee represents an obligation of the bank to return the advance payment to beneficiary in the event that, after receiving an advance, the principal does not perform its contractual obligations.
Performance Guarantee - This guarantee secures the timely delivery of goods or performance of services as per specific contractual obligation.
Bid Bond/Tender Guarantees - This guarantee ensures performance of the obligations by the bidder to the project owner or other party as per the terms of the tender.
Customs/Tax Guarantee - This guarantee secures the obligation of the entity performing import and export operations to the customs authorities for payment of customs taxes and duties.
Guarantee of Warranty Execution - This guarantee ensures compliance of delivery with the quality parameters defined by the contract terms.
Credit Facility Guarantee - This guarantee is a security for repayment of credit.
- Buyer is not required to make payment in advance for the goods supplied
- Buyer gains reliable partner status on local and international markets, benefits from various partnership opportunities and is able to demand more preferable trading terms from partners.
- Serves as a Seller’s protection from the counterparty’s default.
- Bank Guarantees require short processing time with low corresponding commission fees.