Banker’s Guarantee/Standby Letter of Credit

Banker’s Guarantee/Standby Letter of Credit

Provide payment assurance to your beneficiaries

Reassure your buyer or seller of payment with a Banker’s Guarantee/Standby Letter of Credit. In the event that you fail to fulfil your contractual obligations, we will honour payment to your beneficiaries upon receipt of a claim that complies with the guarantee/standby letter of credit terms.

 

How Banker’s Guarantee/Standby Letter of Credit works?

 

  1. Applicant and beneficiary enter into a contract and agree that a Banker’s Guarantee/Standby Letter of Credit is required
  2. Applicant approaches DBS (issuing bank) to issue a Banker’s Guarantee/Standby Letter of Credit in favour of the beneficiary
  3. DBS issues the Banker’s Guarantee/Standby Letter of Credit, and
    1. sends it to an advising bank, which is usually located in the beneficiary’s country, or
    2. couriers the hardcopy of the Banker’s Guarantee/Standby Letter of Credit to the beneficiary, or
    3. notifies applicant to collect at DBS branches or trade counters
  4. Once the advising bank receives the Banker’s Guarantee/Standby Letter of Credit, it will advise it to the beneficiary

 

Why choose DBS Banker’s Guarantee/Standby Letter of Credit?

  • Grow your business with the Best Trade Finance Bank in Singapore, as named by Alpha Southeast Asia and The Asia Banker in 2012. We also received this accolade from Global Finance in 2012, for the 8th consecutive year
  • Leverage DBS Bank’s AA- and Aa1 credit rating to provide your beneficiary with payment assurance upon receipt of claims made out in compliance with the guarantee/standby letter of credit terms
  • Submit your application form at one of our Trade collection branches or Enterprise Banking Centres, or via IDEAL™ (our online banking platform) for greater convenience

Product Details

  • A Banker’s Guarantee/Standby Letter of Credit can be used as a:
    • Payment Guarantee – This protects the beneficiary in the event that the applicant fails to honour the payment under their contract
    • Bid Bond – This enables the applicant (bidder) to use DBS’ credit to support the bid, and can also be used to insure the successful bidder that the contract will be met
    • Performance Bond – Some bidding contracts require the successful bidder to provide a performance guarantee to protect against a default
    • Financial Guarantee – This helps the applicant’s overseas subsidiaries obtain financing or credit facilities from banks
  • The Guarantee/Standby Letter of Credit can be issued by DBS Hong Kong or by our overseas branches/correspondents, according to the guarantee/standby letter of credit format provided by the applicant
  • Guarantees/Standby Letters of Credit issued in favour of beneficiaries must be for a specific amount, expiry date and claim period
  • Guarantees/Standby Letters of Credit should not be assigned to other parties
  • Guarantees are subject to Uniform Rules for Demand Guarantees (“URDG”) or Hong Kong law and the jurisdiction of the Hong Kong courts; whilst Standby Letters of Credit are subject to International Standby Practices (“ISP98”) or Uniform Customs and Practice for Documentary Credits, 2007 Revision, ICC Publication No. 600 (“UCP600”)

FAQs

How do I complete the Banker’s Guarantee/Standby Letter of Credit application form?

Please call us at 2290 8068 for enquiry.

Where do I find a Banker’s Guarantee/Standby Letter of Credit format?

The format is usually provided by the beneficiary of the Banker’s Guarantee/Standby Letter of Credit, so please ask them for a copy.

How long does it take to process a Banker’s Guarantee/Standby Letter of Credit?

Banker’s Guarantee will be issued on the same day if the application is received before noon and credit limit is in place.

Standby Letter of Credit will be issued on the same day if the application is received before 6pm and credit limit is in place.

Where do I collect my Banker’s Guarantee/Standby Letter of Credit?

Our trade operations officer will contact you to arrange your preferred collection point.

 

How do I apply?

Simply submit your application form and a copy of the banker’s guarantee/standby letter of credit format at one of our Trade Collection Branches or Enterprise Banking Centres. Alternatively, you can apply via IDEAL™.

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Awards
Awards

Best Trade Finance Bank in Singapore, 2012, Alpha Southeast Asia

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