For the guarantee there is a legal definition and acceptable banking practice, which declares that:’ A bank guarantee is a unilateral contract between a bank as the guarantor and a beneficiary as the party to whom a guarantee is made. Under this contract, the bank undertakes to make payment to the beneficiary within the limits of the stated sum of money, if a third party fails to effect performance or if some other event get materialized or fails to be materialized.’
Guarantees are a means of managing various risks involved transactions in trade and have long been considered an assurance in commercial contracts.
Generally FX L/Gs are divided in two groups as Imported and Exported L/Gs which we at Bank Pasargad are prepared to issue them as follows:
Imported L/Gs are issued by requesting seller/foreign contractors and against counter guarantee of correspondent banks in favor of Iranian buyers/employers. About Imported guarantees, the credit of seller bank and provision of counter guarantee are most significant matter.
Exported guarantees are divided in three groups in terms of subject:
A-Exported guarantees with subject of technical and engineering services
B-Exported guarantees with subject of goods
C-Exported guarantees with subject of internal contracts
All kinds of above mentioned L/Gs are issued in form of Tender/Bid Bond, (Good) Performance, Advanced Payment, Retention Bond and other kinds of guarantees.