Federal Bank, an Indian private sector bank, has entered into a partnership with National e-Governance Services Limited (NeSL) to digitize its bank guarantee facility. The aim of this collaboration is to eventually replace the traditional paper-based process with a fully digital system. Currently, the electronic bank guarantee facility is available in states where e-stamping is implemented.
A bank guarantee serves as a financial assurance provided by a bank to an external party in the event that a borrower fails to repay a debt. Through the electronic bank guarantee facility, all processes including issuance, invocation, amendment and cancellation are conducted in a digital format, eliminating the need for physical documentation. This facility is open to various stakeholders such as individuals, sole proprietors, companies, partnership firms, government agencies and people’s associations.
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Shalini Warrier, Executive Director of Federal Bank, expressed the bank’s commitment to embracing digital innovation with the launch of the e-Bank Guarantee in collaboration with NeSL. The bank sees this initiative as a testament to their focus on digital transformation while emphasizing the importance of a customer-centric approach.