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Guarantee for the return of an advance payment

A guarantee for the return of an advance payment is a non-payment guarantee and represents an irrevocable obligation on the part of the bank to pay a financial sum specified in advance if the mandator, after receiving an advance payment, fails to meet its contractual obligations relating to the delivery of goods or services covered by the guarantee.

Advantages

  • The guarantee represents a reliable security of the obligation of the supplier (mandator), while the customer (guarantee recipient) has the security of knowing that it will receive a settlement from Raiffeisenbank under the terms of the guarantee if the supplier does not meet its contractual obligations linked with the delivery and if the recipient (beneficiary) requests a settlement in accordance with the terms and conditions of the guarantee.
  • The guarantee reinforces the creditworthiness of the supplier (mandator) in relation to the customer (recipient/beneficiary).

A guarantee for the return of an advance payment allows the supplier (mandator) to dispose of financial resources which the customer provided it against submission of a bank guarantee.

Drafting a guarantee for a payment made in advance and the settlement from the guarantee

  • Upon being requested by the client (supplier) Raiffeisenbank draws up a guarantee for the return of a payment made in advance to the level and for the term specified in the conditions of the contract concluded 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 drawn up.
  • In the contract on the provision of a guarantee, or the loan agreement, the client agrees that, if Raiffeisenbank is requested for payment in accordance with the terms and conditions of the guarantee, it will pay this sum irrevocably to the benefit of the guarantee recipient (the beneficiar.
  • 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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