Bank Guarantees
BNBL started issuing Bank Guarantees and Performance Guarantees from 1997.Today the total outstanding portfolio for each is Nu.392,551,668.72 and Nu.320,092,843.09 respectively as of 30/06/2007.

Types of Bank Guarantees:-
1. Bank Guarantee for Bid Security/Earnest Money Deposit (EMD)
2. Bank Guarantee for Mobilization Advance
3. Bank Guarantee for Advance Payment
4. Bank guarantee for Retention of Money
5. Bank Guarantee for Security Deposit
6. Bank guarantee for Defect Liability
7. Performance Guarantee Inland
8. Bank Guarantee Foreign
9. Performance Guarantee Foreign

Policy:
Commission Rate

• Bank Guarantee for EMD & Bid Security
  • Up to Nu.500,000.00 = Nu.1,000.00
  • 500,001.00 to Nu.1,000,000.00 = Nu.2,000.00
  • Above Nu.1,000,001.00 = Nu.3,000.00
  
• Bank Guarantee for Mobilization Advance
  • 2% on the guarantee amount
  
• Bank Guarantee for Advance Payment
  • 2% on the guarantee amount
  
• Bank guarantee for Retention of Money
  • 2% on the guarantee amount
  
• Bank Guarantee for Security Deposit
  • 2% on the guarantee amount
  
• Bank guarantee for Defect Liability
  • 2% on the guarantee amount
  
• Performance Guarantee Inland
  • 3% on the guarantee amount
  
• Bank Guarantee Foreign
  • 3% on the guarantee amount
  
• Performance Guarantee Foreign
  • 3% on the guarantee amount
  
• 1% for Margin Money Deposits for both Bank and Performance Guarantees; domestic.
  

• Security Coverage 1:1
• Immovable properties; House/Building must be commercially viable
• Movable properties; Equipment/Vehicles (not older than five years)
• Gold jewelleries and Fixed Deposit Certificates
• Should be a Bhutanese citizen
• Should have a sound source of repayment
• Guarantees issued must be covered at the ratio of 1:1

• Authenticated ownership of properties
• 2 Nos of Passport size photograph
• Trade License
• CDB Certificate (if it is Construction Company)
• Citizenship Identity Card Copy
• FIS clearance

Credit Process
Step 1: Write an application for guarantee, mentioning the type of guarantee, the guarantee amount, validity period and the beneficiary with all documents attached..

Step 2: The Credit Officer will review your documents and proposal. The engineering division will determine your collateral value.

Step 3: On acceptance of your proposal, Loan clearance from other Financial Institution Viz. BOB, BDFC, NPPF and RICB will be sought. The maximum Period for obtaining loan clearance is one week after which we commence our loan appraisal to the loan committee.

Step 4: Following the above, the actual appraisal and approval time would take one day at the maximum. The loan committee consist Appraisal Officer, Legal Officer, Dy. Credit Head, Credit Head, Dy. Managing Director and the Managing Director.