The reason for launching electronic bank guarantees is to provide a faster turnaround time compared to the traditional paper-based process of issuing inland bank guarantees. The Bank of Baroda claims that e-BGs will significantly reduce the average turnaround time from 2-3 days to a few minutes.
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Bank of Baroda announced the launch of the Electronic Bank Guarantee (BG) system in partnership with National E-Governance Services Limited (NeSL), the government-backed Information Utility appointed by the Insolvency and Bankruptcy Board of India.
The new facility will enable the public sector bank to issue inland bank guarantees electronically on its digital platform BarodaINSTA.
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.
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).
With this launch, Bank of Baroda 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.
Bank of Baroda is engaged in providing various services, such as personal banking, corporate banking, international banking, small and medium enterprise (SME) banking, rural banking, non-resident Indian (NRI) services and treasury services
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.
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