Bank Guarantee

A Bank Guarantee (BG) being a commercial instrument is used as a legal contract. NHAI have already been issued some of the E-BGs by the Banks. The NHAI would be using the E-BG services of National e-Governance Services Limited (NeSL), to facilitate reduced physical paper movement, eliminate physical storage needs and provide easy access for Bank Guarantee life cycle events

The National Highways Authority of India (NHAI) digitalising all its existing Bank Guarantees, it is now accepting Electronic Bank Guarantees (E-BGs). In order to boost the efficiency and transparency of internal processes and take the adoption of digital technology ahead, this is being done, said an official statement.

A Bank Guarantee (BG) being a commercial instrument is used as a legal contract. Under this, a bank acts as a guarantor and undertakes an obligation to pay the beneficiary a certain amount of money in case the original debtor from the contract defaults on contractual terms and obligations. 

The NHAI would be using the E-BG services of National e-Governance Services Limited (NeSL), to facilitate reduced physical paper movement, eliminate physical storage needs and provide easy access for Bank Guarantee life cycle events such as invocation, renewal and closure. NHAI have already been issued some of the E-BGs by the Banks.

The Secretary, Ministry of Road Transport and Highways and Chairperson, NHAI, Alka Upadhyaya said that, in line with the spirit of Digital India, we motivate the concessionaires to adopt E-BGs. Bank guarantees are required by NHAI to ensure faithful fulfilment of contractual obligations.

“The physical form of the BG presents challenges like time consuming verification process and possibility of frauds,” the statement added.