Federal Bank, NeSL partner to offer electronic bank guarantee

Indian private sector bank Federal Bank has partnered with National e-Governance Services Limited (NeSL) to digitise its bank guarantee facility. With this partnership, Federal Bank hopes to completely replace the traditional paper-based process ‘in due course’. The electronic bank guarantee facility is currently available only in states where e-stamping is available.

A bank guarantee is an assurance a financial institute like a bank offers to the external party if the borrower is unable to pay the debt. With electronic bank guarantee facilities, the issuance, invocation, amendment, and cancellation are in digital form, removing the need for printing any document. Stakeholders like individuals, sole proprietors, companies, partnership firms, government agencies, and people’s associations, among others are eligible to avail this facility.

"In the continuing tradition of the Bank’s mantra of ‘digital at the fore, human at the core’, we are proud to have gone live with e-Bank Guarantee in association with NeSL. We thank NeSL for pioneering this initiative & we are truly delighted to be one of the few Banks offering this feature,” said Shalini Warrier, executive director of Federal Bank.

The benefits of e-bank guarantee include saving time and cost, enabling faster communication, removing the scope for fraud, and ensuring correct payment of stamp duty. NeSL's e-bank guarantee platform will be available 24/7, said the spokesperson.

"In today's era of instant messaging, there is no reason why a beneficiary of Bank Guarantee or BG should wait for the BG to be delivered through Courier or hand delivery, followed by a tedious process of verifying the authenticity of the same. An e-BG issued through NeSL's e-BG platform becomes instantly available and the beneficiary can access it upon completion of a simple and one-time registration process,” said Debajyoti Ray Chaudhuri, managing director and chief executive officer of NeSL.