Letters of Guarantee:
A letter of guarantee is a pledge on the part of the bank and is independent of the commercial exchange agreement between the applicant and the beneficiary. It is issued directly for the benefit of the beneficiary and the bank undertakes to guarantee the payment of the dues without any delay upon receiving the payment request that is in accordance with the agreement and the terms of the guarantee..
The following are the main types of letters of guarantee:
Initial letter of guarantee
Advance payment guarantee letter
A letter of good performance guarantee
Controls and procedures for issuing letters of guarantee :
1- Writing a request from the client.
2- A copy of the bid in the case of initial letters of guarantee or a copy of the contract or acceptance letter in the case of letters of guarantee of advance payment and good execution.
3- Providing an acceptable guarantee to the bank.
4- Formate filling (A + B).
5- Pay the cash margin according to the controls.v
6- Attach a copy of the client's documents, the company, or the business name, in case of the first issue.
7- Complete the coding documents for the company in addition to its owners in the absence of a credit code.