Raiffeisen Bank 

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Infoline: 800 900 900

Performance Bond

A performance bond is a non-payment guarantee and an irrevocable obligation of the bank to pay a monetary amount determined in advance in the event that the supplier (applicant) does not meet its contractual obligations to make deliveries in the quantity and quality, and by the dates specified, or other conditions, for example governing installation, training, etc.

Benefits

  • The guarantee is quality security for an obligation of the applicant, and its beneficiary obtains certainty that it will receive performance from Raiffeisenbank under the guarantee in the event that the applicant does not meet its obligations under a contract and if the recipient (beneficiary) asks for performance, in accordance with the conditions of the guarantee.
  • It strengthens the trustworthiness of the supplier (applicant) in relation to the customer (beneficiary).

A guarantee for correct performance of contract is a suitable tool to ensure compliance with the contractual conditions of a contract by a supplier.

Issuance of performance bond and performance under guarantee

  • Raiffeisenbank issues a performance bond based on the client’s application up to the amount and with a tenor in accordance with the terms and conditions of the contract between Raiffeisenbank and the client.
  • Together with a request for the issuance of a guarantee, the client submits documents containing the conditions and requirements under which the guarantee should be issued.
  • In the contract on issuance of a guarantee or in the loan contract, the client expresses its agreement that if Raiffeisenbank, in accordance with the conditions of the guarantee, is asked for performance under the guarantee, it will provide irrevocable performance in favour of the guarantee’s beneficiary.
  • With regard to the fact that a guarantee represents an irrevocable obligation, Raiffeisenbank cannot change the conditions of the guarantee in a manner unfavourable to the beneficiary or cancel the guarantee without the consent of the guarantee’s beneficiary.
  • Raiffeisenbank provides performance under the guarantee only in the event it receives an invitation to perform submitted by the guarantee’s beneficiary in accordance with the terms and conditions of the guarantee.

Collateral

The requirements for collateral for a guarantee will be communicated by Raiffeisenbank to the client in connection with its check on the client’s good standing.



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