x You are an exporter, commodity importers need to learn deeply about the term Bank Guarantee?
x You want to know the rules, advantages, forms and those who apply Bank Guarantee?
x You have not grasped the procedure for the bank guarantee procedures Bank Guarantee?
Proship.vn we will approve this sharing to answer Bank Guarantee in import and export? Regulations, how the calculation of Bank Guarantee is like? What are the characteristics of Bank Guarantee? What advantages and disadvantages of Bank Guarantee?, ... Along with that is the sequence of Bank Guarantee procedures that the importer, export, goods owners, businesses need to know.
What is Bank Guarantee? What forms are there?
Want to know what Bank Gurartee is and what forms are there, and update the following knowledge:
What is Bank Guarantee?
What is Bank Guarantee in import and export? Bank Gurartee means a bank guarantee, a written commitment of a credit institution (guarantor) with the right party (guarantor) on the performance of financial obligations on behalf of the customer (the guarantee) when the customer does not perform or performed an incorrect obligation committed to the guarantor.
Bank Guarantee forms
For businesses, bank guarantee is usually applied in two forms:
- Financial guarantee: Used to ensure the amount to pay or deposit. This makes buyers trade with sellers more easily, even when capital is tight.
- Performance guarantee: Ensuring the obligations and efficiency of both parties. If the contract violations, the victim will be compensated by the bank.
Who is Bank Guarantee bank guarantee and how to charge?
Along with understanding what Bank Guarantee is in import and export, the object and how to calculate the bank guarantee is also very important:
Objects are guaranteed banks
The subjects are guaranteed Bank Guarantee Bank:
- Legal businesses in Vietnam market.
- Credit institutions are established and operate under the law of credit institutions.
- Cooperatives and other organizations are eligible for the provisions of Article 94 of the Civil Code.
- Foreign economic organizations participating in joint venture cooperation contracts and participating in bidding in investment projects in Vietnam market
How to calculate bank guarantee fee
Bank Guarantee bank guarantee fee is the fee that the guarantor pays to the bank when using the service. So, what is the calculation of Bank Guarantee fee? Proship has recorded the guarantee fee according to the ratio is calculated as follows:
Guarantee fee = guarantee amount * fee rate * Guarantee time
* In there:
- The guarantee amount: is the amount of the bank committed to pay instead when the guarantee does not fulfill the commitment in the contract;
- The rate of charges (%): Depending on the type of guarantee and depending on the bank in other countries, there will be different fees.
Bank guarantee Bank Guarantee has what characteristics and advantages and disadvantages?
What are the characteristics and advantages and disadvantages of Bank Guarantee Bank Guarantee? That is:
Characteristics of bank guarantee
Understand the characteristics of bank guarantee to help businesses consider whether to carry out bank guarantee procedures:
- Bank guarantee is a specific trading or commercial act;
- Bank guarantee activities are usually credit institutions;
- Credit institutions are guarantors and a banker;
- In the bank guarantee transaction, there will be 2 contracts, including guarantee service contracts and guarantee/guarantee commitments;
- The transaction is established and implemented based on documents and obligations of the guarantor must be set in writing;
- Bank guarantee transactions are not transactions on both sides or three sides but a double transaction;
- Bank guarantee is an unconditional type of guarantee (or independent guarantee).
Advantages and disadvantages of bank guarantee
Advantages of bank guarantee:
- Bank guarantee reduces financial risks related to business transactions among companies or individuals;
- Low risk encourages sellers/business development companies based on prestige;
- Banks often calculate low guarantee fees, thus creating opportunities for small businesses to develop;
- If the bank analyzes and confirms the financial stability, the company's reputation is also guaranteed, so there will be more business opportunities;
- The guarantee process is easy and can be completed quickly.
Disadvantages of bank guarantee:
- Cases of enterprises are not reputable enough (still outstanding loans, bad debts, etc.) will be difficult to be considered for guarantee;
- With issues that need high value guarantees or high risk rates, the bank will require collateral;
- If the company has a bad reputation (outstanding debt, bad debt ...), it will be difficult to apply for guarantee;
- Banks require collateral when it is necessary to ensure high value or high risk.
Steps to carry out the Bank Guarantee Bank
The Bank Guarantee Bank Guarantee Process is as follows:
Step 1
Customers sign contracts with the partner as required: Payment, construction, bid, ... The partner requires a bank guarantee.
Step 2
Customers will make a record and send a guarantee request to the bank. Bank guarantee procedures include:
- Guarantee request;
- Legal records;
- Purpose records;
- Business financial records;
- Collateral records.
Step 3
The bank will evaluate the legality and feasibility of the guarantee project; legal capacity of customers, guarantee forms; Assess the financial capacity of customers. If approved, the bank and the customer will sign a guarantee contract and the guarantee letter.
Step 4
The bank will notify the guarantee letter to the guarantor. There will be clear regulations in the basic contents in the guarantee contract.
Step 5
The bank will fulfill the guarantee obligations with the guarantor if arising.
Step 6
The bank requires the guarantee to fulfill its financial obligations to the bank such as: repaying principal, interest and fees.
If the party is guaranteed to violate the obligations, the bank will conduct a replacement payment and automatically account for compulsory loans for the debt repayment instead of the overdue debt interest rate of the guaranteed side.
What is Bank Guarantee and the same rules, objects, calculations, characteristics of the Bank Guarantee Bank Guarantee in the import and export, etc., which we have synthesized knowledge from many reliable sources to share to readers.
Hopefully this will be a useful reference source for those who have been and will be involved in the field of import and export. Contact 0909 344 247 for questions about Bank Guarantee and many other specialized terms and advice on cheap multimodal transport services only available at Proship Logistics.
