Important information
What type of guarantee do you need?
If a bank guarantee is required under the terms of a commercial contract or a tender invitation, you certainly need a payment guarantee or a tender guarantee.
Which bank shall issue the guarantee?
The guarantee can be issued by Fibank Cyprus or a foreign bank.
What type of security does the bank accept?
Since the guarantee is a credit instrument, the issuing bank evaluates the potential credit risk, and therefore asks for security. The bank accepts cash cover, assets of the companies pledged to the name of the bank, sureties, etc
How to apply for a guarantee?
1. The client fills in the Bank guarantee application form and submits it to the bank.
2. Upon a positive decision for the issuing of the requested guarantee, the Bank will ask the client to sign:
- Guarantee Agreement stipulating the terms and conditions on issuing of a guarantee
- Pledge Agreement
3. The Bank hands the Letter of Guarantee to the customer’s representative or transmits it to a foreign bank by SWIFT for further delivery to the beneficiary.
Counter-guarantees
Fibank Cyprus issues a counter-guarantee to a foreign correspondent bank asking to issue its own guarantee in favour of a foreign partner of our customer. Thus the foreign business partner receives the guarantee from his local bank. In the event case of a claim the beneficiary asks for the payment directly from his bank. In turn, Fibank Cyprus shall be responsible to the foreign bank under its counter-guarantee.
Advising on guarantees
Fibank Cyprus advises on guarantees issued by other banks without any obligations on its part. The bank also authenticates the document which is handed over to the customer. Upon the customer’s request the bank informs about the potential risks to the beneficiary and the procedure of claiming, if any.
Making a demand upon request of a beneficiary
At the request of the beneficiary Fibank Cyprus examines the terms of the guarantee and makes a demand via SWIFT to the issuing bank. In this case Fibank Cyprus is responsible only for the accuracy of the demand, but does not ensure the payment under the demand.
Documentary collections
Fibank Cyprus offers clients who are dealing with export and/or import of goods the opportunity to use documentary collection. Documentary collection is a documentary payment form widely used in international trade. The exporter´s bank by the order of the exporter sends the documents by post to the importer through his bank. The documents are issued to the importer against payment or acceptance of a bill of exchange. An exporter should know that the banks do not undertake the payment liabilities while dealing with documentary collections. Therefore, documentary collection is usually used between trusting partners.