Raiffeisen Bank 

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Payment Guarantee

A payment guarantee represents an irrevocable obligation on the part of the bank to pay a financial amount up to a level specified in advance in the event of the mandator not meeting its payment obligations specified in the guarantee document. It is usually issued in association with a purchase agreement in order to secure payment of the receivables of the seller (beneficiary) in respect of the buyer (mandator) on their due date.

Advantages

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

A payment guarantee allows the mandator as buyer to receive a postponement of payment.

Drafting a payment guarantee and the settlement from the guarantee

  • Upon being requested by the client Raiffeisenbank drafts a payment guarantee to the level and for the term specified in the contract between Raiffeisenbank and the client.
  • Along with the application for the drafting/provision of a guarantee, the client submits documents containing the conditions and requirements under which the guarantee is to be drafted.
  • In the contract on provision of a guarantee or the loan agreement the client agrees that, if Raiffeisenbank is asked to make payment under the guarantee in accordance with the conditions of the guarantee, it will make an irrevocable payment to the benefit of the guarantee recipient (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 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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