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Bank of Baroda launches electronic bank guarantee on its digital platform
May 11, 2023
State-owned Bank of Baroda on Wednesday announced the launch of electronic bank guarantee (e-BG) on its BarodaINSTA platform, in partnership with National E-Governance Services Limited (NeSL). 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 said it 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.
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.
“Individual contractors, SMEs and large corporates are major applicants for bank guarantees and the move to e-BGs – a quick, seamless, transparent and completely secure process – will benefit them all,” said T N Suresh, General Manager, Head – Forex & Fee Income, Bank of Baroda.
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