Indian Overseas Bank launches Electronic Bank Guarantee

CHENNAI: Indian Overseas Bank (IOB) has launched the facility of issuance of e-BG (Electronic Bank Guarantee) in association with the National e Governance Services limited (NeSL).

A statement here on Tuesday said, all Bank Guarantees (BG) in IOB are currently issued as a paper document followed by SFMS message. All the paper BGs are required to be stamped as per stamp duty law of respective states in which it is issued and are physically signed by bank officials and are delivered to the beneficiary. The entire process starting from application by the customer, processing by the bank, obtaining of physical stamp paper, transit of physical BG to the beneficiary is a time consuming process and there are even chances of misplacing of original BG in transit.

NeSL’s Digital Document Execution platform, which provides e-Stamping and e-Sign functions, will facilitate the e-Bank Guarantee process. Beneficiaries will instantly receive an e-Bank Guarantee on NeSL’s platform without further verification.

BG is an instrument issued by the bank in which the bank undertakes to guarantee a specific amount against the non-fulfilment of some action/performance of the applicant. The guarantee is issued upon receipt of a request from the applicant for some purpose/transaction in favour of a beneficiary.

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