Bank of Baroda launches electronic bank guarantee on its digital platform
New Delhi: State-owned Bank of Baroda on Wednesday announced the launch of electronic bank guarantee (e-BG) on its BarodaINSTA platform, in partnership with National E-Governance Services Limited (NeSL). NeSL is India's first and only Information Utility and is regulated by the Insolvency and Bankruptcy Board of India (IBBI) under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC).
Bank of Baroda to issue electronic bank guarantees
With this launch, Bank of Baroda said that it has joined a select group of banks to issue electronic bank guarantees. Electronic bank guarantee is a start-to-end digital process across the complete lifecycle of a BG including issuance, amendment and closure resulting in substantial reduction in the turnaround time in issuing a BG, while at the same time bringing in greater security and accessibility.
The conventional paper-based process of issuing inland Bank Guarantees normally takes a few days to execute from BG issuance to receipt by the beneficiary, the lender said. Further in the absence of a central repository, it is difficult to verify the BG status and there is also scope for misuse.
"Individual contractors, SMEs and large corporates are major applicants for bank guarantees and the move to e-BGs - a quick, seamless, transparent and completely secure process - will benefit them all," said T N Suresh, General Manager, Head Forex & Fee Income, Bank of Baroda.
'NeSL's e-BG meets a long-standing requirement of the banking industry'
In his comments, Debajyoti Ray Chaudhuri, MD and CEO of NeSL said NeSL's e-BG meets a long-standing requirement of the banking industry for a digital product that addresses the challenges in the physical process of issuance of e-BGs.
NeSL offers a platform for the issuance of Inland BGs through electronic mode. The digital steps in an e-BG include BG application, preview and confirm, paperless e-stamping, e-signing, hosting of the final electronic BG on the NeSL portal and intimation of final BG to the beneficiary. The beneficiary can view the final digital BG on the NeSL portal immediately on issuance. Such an e-BG eliminates the need for a separate authentication from the BG issuing Bank.
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