Bank of Baroda | BOB launches electronic bank guarantee on digital platform

Lucknow: Bank of Baroda, one of India’s leading public sector banks, in partnership with National e-Governance Services Limited (NESL) has launched Electronic Bank Guarantee (E-BG) on its Baroda Insta Platform. ) which provides a platform for issuance of inland bank guarantees through electronic mode. NESL is India’s first and only information system regulated by the Insolvency and Bankruptcy Board of India (IBBI) under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). With this launch, Bank of Baroda has joined a select group of banks to issue electronic bank guarantees. Electronic Bank Guarantee is a start-to-end digital process including issuance, modification and closure throughout the lifecycle which will result in significantly reduced turnaround time for issuance of Bank Guarantees as well as greater security and easier access The traditional paper-based process of issuing an inland bank guarantee usually takes a few days to execute, from the time it is issued to its receipt by the beneficiary. Furthermore, in the absence of a central repository, it is difficult to verify the status of BGs and is prone to abuse. Frauds can be prevented Physical stamping in e-BG is replaced with e-stamping through NESL, thereby preventing frauds. The e-BGs are stored in a central repository resulting in complete transparency and accessibility for all stakeholders as well as ease of authentication and verification. Moreover, an electronic bank guarantee is processed and delivered within minutes as against an average TAT of 2-3 days in case of a traditional BG. Also read Electronic Bank Guarantee A Transformational Facility T.N. Suresh, General Manager, Head-Foreign Exchange & Fee Income, Bank of Baroda said, “Electronic Bank Guarantee is a game-changing facility through which we endeavor to make banking simpler, more secure and easily accessible for our customers. Individual contractors, SMEs and large corporates are major applicants for bank guarantees and will benefit from using e-BG, a quick, seamless, transparent and fully secure process. Debajyoti Ray Chowdhury, MD & CEO, NESL said that over the last few years, India has built a strong digital infrastructure and this is driving growth across all sectors of the economy. The banking industry in general and BOB in particular has been at the forefront of making its products and processes available digitally. NESL’s e-BG will address the long-standing need of the banking industry as a digital product and provide a solution to the challenges faced in the physical process of issuing e-BGs. We have had several discussions with our members from the conception to the launch of this product. We are thankful to Indian Banks’ Association for all the co-ordination and co-operation.