Payment procedures play an important role in all commercial transactions both domestically and internationally. Therefore, to ensure that the payment process is carried out as committed, the parties involved will apply a payment guarantee. What is a payment guarantee? How does the payment guarantee process at the bank take place? Find out now with Seabank!
What is a payment guarantee?
Payment guarantee is a form of financial guarantee to ensure the payment ability of the guaranteed party according to the signed commitment.
Payment guarantee is a safe financial measure for businesses.
In other words, this is considered a written commitment issued by the guarantor regarding the performance of payment obligations to the guaranteed party. Through these commitments, the guarantor creates many conditions for the payment recipient, helping to increase their opportunities and capabilities in performing their obligations.
If the guarantor cannot fully perform its payment obligations when due, the beneficiary will take over this task.
Payment guarantee regulations
Payment guarantee is regulated by law as follows:
- The commitment to perform the responsibility to pay the entire value or part of the contract to the guaranteed party will depend on the agreement between the parties.
- The payment guarantee will be limited to the amount stated on the payment guarantee document and will not limit the range of the amount that can be paid. This means that the guarantor will be responsible for paying the beneficiary the maximum amount stated on the document in all amounts such as interest, compensation, penalties, etc.
- Payment guarantees are allowed to use assets or cash as security. This measure depends on the agreement between the guaranteed party and the guarantor.
- If the guaranteed person dies or the guaranteed organization or business goes bankrupt, this form of guarantee will lose its value in the future.
Payment guarantee regulations belong to the echo row
6 steps in the payment guarantee process
Enterprises must prepare complete records and related documents to serve the management, inspection and approval of competent authorities before registering for payment guarantee. The payment guarantee process at banks in Vietnam includes the following steps:
Step 1: There is a request for the use of payment guarantee products by the parties involved in the contract.
Step 2: The guaranteed party who chooses a bank payment guarantee must provide a request for opening a guarantee to the bank. A set of documents required to open a guarantee includes:
- Application for opening bail.
- File and the legal papersneed design of the organization.
- Collateral, set financial records
- Commercial contract.
Step 3: The bank uses professional expertise to assess the applicant's needs and capabilities. This work is also known as the appraisal of the documents provided by the customer based on the following factors:
- Project feasibility.
- Legality of the project.
- The guaranteed party's ability to perform the contract.
- Financial situation of the guaranteed party.
- Collateral
In case the guarantor meets the above criteria of the bank, the bank will start to open a guarantee for the commercial contract signed by both parties. From here, the payment guarantee relationship will arise.
Payment Guarantee Process
Step 4: Between the guaranteed organization and the bank, the rights and obligations are bound. The bank is responsible for providing a letter of guarantee, a contract agreeing to open a guarantee between the two parties. This contract has the right to bind the payment guarantee and is not related to the commercial contract.
Step 5: Exercising the rights and responsibilities of the guarantee in case the guaranteed party fails to perform according to the signed agreement. At this time, the bank will perform the payment obligation when it has received the payment request documents from the guarantee recipient. This supports the guaranteed party to have full capacity to perform the obligations signed in the commercial contract.
Step 6: The guaranteed party must make payments to the banks within the specified time. The bank will notify the guaranteed party of the completion of the payment obligation. Including principal, interest and other arising fees.
Prestigious payment guarantee service at Seabank
Payment guarantee is considered an important financial tool in purchasing and trading activities, helping organizations limit many payment risks as well as contribute to enhancing business reputation. However, choosing a reliable payment guarantee product provider is not simple.
SeABank is a reputable payment guarantee service provider in Vietnam.
With many years of operation in the financial sector, SeABank is always proud to be the bank that brings the top quality services in Vietnam. In particular, the payment guarantee product package is trusted by many businesses because of its outstanding features such as:
- Fast, professional service: SeABank's payment guarantee helps businesses build reputation and professionalism when paying for purchases on credit.
- Competitive Guarantee Fees: SeABank confidently offers the most competitive payment guarantee fees in the Vietnamese market, supporting businesses in optimizing costs.
- Safe and reliable: SeABank is a bank with a sustainable financial system, ensuring safety for all guarantee transactions.
- Enthusiastic advice: With a team of experienced and well-trained specialists, SeABank always supports, answers all questions of businesses and provides the most effective solutions.
With the information in the article, SeABank hopes that readers can better understand what payment guarantee is and Payment Guarantee Process bank. If your business is struggling to find a top quality payment guarantee service provider, contact SeABank immediately via hotline 1900.599.952 for more information.
