Banker’s Guarantee/Standby Letter of Credit

Banker’s Guarantee/Standby Letter of Credit

Provide payment assurance to your beneficiaries

Reassure your buyer or seller of payment with a Banker’s Guarantee/Standby Letter of Credit. In the event that you fail to fulfil your contractual obligations, we will honour payment to your beneficiaries upon receipt of a claim that complies with the guarantee terms.

 

 How does a Banker's Guarantee/Standby Letter of Credit work?

 

 

  1. Applicant and beneficiary enter into a contract and agree that a Banker’s Guarantee is required
  2. Applicant approaches DBS (issuing bank) to issue a Banker’s Guarantee in favour of the beneficiary
  3. DBS issues the Banker’s Guarantee, and
    1. sends a financial instruction to an advising bank, which is usually located in beneficiary’s country, or
    2. couriers the hardcopy Banker’s Guarantee to the beneficiary, or
    3. notifies the applicant of self-collection at any of branches
  4. Once the advising bank receives the Banker’s Guarantee, it will advise it to the beneficiary

 

Why choose DBS Banker’s Guarantee/Standby Letter of Credit?

  • Grow your business with the Best Trade Finance Bank in India and the bank that was named the Rising Star for the Transaction Bank category, both awarded by The Asset in 2013
  • Leverage DBS Bank’s AA- and Aa1 credit rating to provide your beneficiary with payment assurance upon receipt of claims made out in compliance with the guarantee terms
  • Submit your application through any DBS Branch, or IDEAL™ (our online banking platform) for greater convenience

Product Details


  • A Banker's Guarantee/Standby Letter of Credit can be used as a:
    • Payment Guarantee – This protects the beneficiary in the event that the applicant fails to honour the payment under their contract
    • Bid Bond – This enables the applicant (bidder) to use DBS' credit to support the bid, and can also be used to insure the successful bidder that the contract will be met
    • Performance Bond – Some bidding contracts require the successful bidder to provide a performance guarantee to protect against a default
    • Financial Guarantee – This helps the applicant’s overseas subsidiaries obtain financing or credit facilities from banks
  • The Guarantee can be issued by DBS India or by our overseas branches/correspondents, according to the guarantee format provided by the applicant
  • Guarantees issued in favour of beneficiaries must be for a specific amount, expiry date and claim period
  • Guarantees should not be assigned to other parties
  • Guarantees are subject to Indian law and the jurisdiction of the Indian courts

ItemPricing

Issuance

Performance: 1.80% p.a., min one quarter and INR 1,500

Financial: 2.00% p.a., min one quarter and INR 1,500

Amendments

Financial: 2.00% p.a., min one quarter and INR 1,500

Non-financial: INR 1,500 flat

Payment

INR 1,500 flat

Cable

INR 750

Courier - Local

Local: INR 250

Overseas guarantee

Additional 0.25% per quarter, min USD 500

FAQs

Where do I find a Banker’s Guarantee/Standby Letter of Credit format?

The format is usually provided by the issuing bank or the beneficiary of the Banker’s Guarantee/Standby Letter of Credit. Alternatively, you may get a copy from your Relationship Manager or contact us at businesscareIN@dbs.com.

How long does it take to process a Banker’s Guarantee/Standby Letter of Credit?

We can process your Banker’s Guarantee/Standby Letter of Credit within 24 hours, provided the application and credit limit are in place.

Where do I collect my Banker’s Guarantee/Standby Letter of Credit?

You may collect it from any of our branches.

 

How do I apply?

Simply submit your application form and a copy of the guarantee format at any of our Branches or via IDEAL™. Alternatively, please send us an email at BusinessCareIN@dbs.com and we will be glad to assist you.