A Bank Guarantee is an unconditional undertaking from the issuing bank, acting on the request of applicant, to pay on demand in writing, a specified sum of money up to the extent of the guarantee, to the beneficiary on behalf of the applicant, without referring to the applicant, within a specified time period. AIB issues bid guarantees, performance guarantees, and advance payment guarantees. For further details and terms and conditions, please contact our nearest branch.
Bid Bonds financially support the ability of a person submitting a tender to perform the contract when awarded. Such a bond is issued in connection with a tender and its normal characteristic is an undertaking by AIB on behalf of the applicant, to pay to the beneficiary, on their demand, a fixed amount within a stipulated period should the applicant withdraw their obligation after the acceptance of his tender.
Under a Performance Guarantee, the Guarantor (AIB) undertakes to a beneficiary on behalf of a contractor to encash the guaranty- amount should the contractor’s obligations under the contract not be duly discharged, as and when notice is served for encashment within the expiry date.
Advance Payment Guarantee
Contracts sometimes provide for an advance payment be made to a contractor for purposes such as site mobilization and equipment acquisition. In order to obtain this payment a contractor is required to produce an Advance Payment Guarantee from AIB. The Bank under this guarantee undertakes to the beneficiary, on behalf of the contractor, to make payment under the Advance Payment Guarantee within a stipulated time period if the contractor fails to repay the mobilization advance to the beneficiary.
Letters of Credit
A commercial Letter of Credit is a contractual agreement between AIB, known as the issuing bank, on behalf of one of its clients, authorizing another bank, known as the advising or confirming bank, to make payment to a beneficiary. The issuing bank makes a commitment to honor drawings made under the Letter of Credit. The beneficiary is normally the provider of goods and/or services.
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