GuaranteesThe purpose of bank guarantees is the additional security of financial interests of the parties participating in foreign trade transactions.
The guarantee is an irrevocable pledge by the bank to ensure payment of a specified amount to the beneficiary of the guarantee (the beneficiary) in the event of non-compliance of its contractual obligations by a party, for which the guarantee is issued (the principal).
The content of the guarantee obligation is always the performance of an agreement / a contract which the guarantee refers to. The bank does not undertake any obligations on the performance of the contract terms; however, the bank guarantees payment of the amount stipulated by the bank guarantee to the beneficiary upon first request, on condition the request complies with the guarantee terms.
This way a client who is engaged in foreign business activities reduces possible losses from non-performance of a transaction to a minimum, which is especially significant for international contracts, when the buyer and the seller operate in different legal areas.
Rietumu Bank issues payment guarantees, performance bonds, advance payment guarantees, tender / bid bonds, etc.
All guarantees are issued with a cash collateral in the amount of the liabilities, placed on a deposit account in Rietumu Bank or a security account. Another type of a collateral can be considered according to the credit policy of the bank.
Rietumu Bank services also guarantee letters issued by other banks in favour of clients.