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.
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.