Raiffeisen Bank 

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Credit Guarantee

A credit guarantee is a payment guarantee and represents an irrevocable obligation on the part of the bank to pay a financial sum specified in advance if the debtor (mandator) does not meet its payment obligations ensuing from a loan agreement concluded with the beneficiary. It may be drawn up not only to cover the principal of the loan, but all payment obligations ensuing from the loan agreement, including interest and other fees.;

Advantages

  • The guarantee represents a reliable security of the mandator’s obligations, while its recipient (beneficiary) is secure in the knowledge that it will receive a settlement from Raiffeisenbank if the mandator does not meet its payment obligations ensuing from a loan agreement and if the recipient (beneficiary) requests the settlement under the guarantee in accordance with the terms and conditions of the guarantee.
  • The guarantee reinforces the creditworthiness of the mandator (debtor) in relation to the recipient (creditor, beneficiary).

A credit guarantee allows the mandator as debtor to obtain the requisite loan from a financial institution at which it has no other suitable method of securing the loan.

Drafting a credit guarantee and the settlement from the guarantee

  • Upon being requested by the client Raiffeisenbank draws up a credit guarantee to the level and for the term specified in the conditions of the contract between Raiffeisenbank and the client.
  • Together with the application for a guarantee to be drafted/provided the client submits documents containing the conditions and requirements under which the guarantee is to be drafted.
  • In the contract on the provision of a guarantee the client agrees that, if Raiffeisenbank is requested for payment in accordance with the terms and conditions of the guarantee, then it will pay this sum irrevocably to the benefit of the guarantee recipient (the beneficiary).;
  • Given that the guarantee represents an irrevocable obligation, Raiffeisenbank may not change the conditions of the guarantee to the detriment of the recipient (beneficiary) or cancel the guarantee without the consent of the recipient (beneficiary).
  • Raiffeisenbank will make a payment under the guarantee only if it receives a request for payment submitted by the guarantee recipient (beneficiary) in accordance with the terms and conditions of the guarantee.;

Security

Raiffeisenbank will inform the client of the need to secure the guarantee depending on the results of its audit of the client’s creditworthiness.

Course of the guarantee

 


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