Product Name

Tender Guarantee/Bid Bond

Product Description

Tender Guarantee/Bid Bond is a written document issued by Bank of China Limited Karachi Branch at the request of the tenderer (bidder) in favor of the tenderee for bids of construction or materials procurement to guarantee that the tenderer will not withdraw or amend its bid within the validity period, and will sign the contract or submit the performance guarantee before the preset deadline once winning the bid.

Functions

Solve the problem of mutual mistrust between the tenderee and tenderer with the bank's credibility to ensure the smooth tender offer; and replace the cash margin by the tender guarantee/bid bond to reduce the financial pressure of the bidders.

Features

1.Solve the problem of mutual mistrust between both parties of a transaction.With good reputation, Bank of China Limited Karachi Branch involves in the transaction and acts as a guarantor to ensure the smooth transaction by providing guarantee for the parties.

2.Reduce the financial pressure.As an alternative to cash margin, it can reduce the tied-up fund for the tenderer.

3.Indemnify the damaged party and penalize the defaulting party.Indemnify the damaged party and penalize the defaulting party in case of breach of contract to avoid and reduce contract breaching activities, thus saving trouble and expenses arising from litigation or arbitration.

Eligible Applicants

1.Contractors in the engineering projects.

2.Suppliers under the material procurement contracts.

Application Requirements

1.The applicant shall hold a license of legal person that has passed the annual inspection or other valid certificates which fully prove its legal operation and scope of business.

2.The applicant shall have the qualification to engage in relevant business (such as qualification of contracting foreign projects, construction qualification of building enterprises, etc.).

3.The applicant shall have a credit line at Bank of China Limited Karachi Branch, or pay full margin, or full guarantee acceptable to Bank of China Limited Karachi Branch.

Procedure

I.Application for letter of guarantee

1.The applicant fills out an application form.

2.The applicant pays margin or has the relevant credit line.

3.The applicant submits primary documents related to the contract.

4.The applicant submits other documents necessary for issuance of a letter of guarantee as required by Bank of China Limited Karachi Branch.

II.Verification and issuance of letter of guarantee

1.Bank of China Limited Karachi Branch verifies the customer qualification, underlying transaction and relevant documents.

2.Bank of China Limited Karachi Branch confirms the customer's margin or credit line.

3.Bank of China Limited Karachi Branch verifies the written application and form of letter of guarantee.

4.Bank of China Limited Karachi Branch issues the letter of guarantee.

Gentle Reminders

1.Amendment to letter of guarantee: At the request of the guaranteed party and the beneficiary, the clauses under the letter of guarantee can be amended, for example, the validity period can be extended.

2.Payment/compensation against letter of guarantee: If the beneficiary claims compensation within the validity period of the guarantee, the applicant shall be notified in time. The payment shall be made after the guarantee issuing bank verifies the claim documents and confirms that they are in compliance with the claim clauses under the guarantee.