Question: How many types of Bank Guarantee have in Malaysia and what are the features of Bank Guarantee?
Answer: In Malaysia there are following types of Bank Guarantee having:
Performance Guarantee
Tender Guarantee / Bid Bond
Advance Payment Guarantee
Retention Guarantee
Warranty Maintenance Guarantee
Following are features of Bank Guarantee:
Can be issued to a local party as well as a foreign party
Also available under Islamic financing as Bank Guarantee-i
Contains a specific validity period of coverage and claim period
Backed by over 400 branches nationwide, a network of over 80 international offices and more than 800 correspondent banks worldwide
Takes the form of a Financial Guarantee which ensures the fulfilment of financial obligation by you, and a Performance and Tender Bond, which ensures the performance of an act agreed between you and the beneficiary
Usually used to bid for tenders, as a contract requirement, or to guarantee payment obligation
Available to customers with a trade facility or on an ad hoc basis (with certain limits prescribed)