Defence Minister Rajnath Singh
The Defence Ministry on Thursday issued a standard operating procedure (SOP) that induces clarity in the steps a buyer has to take to verify bank guarantees (BGs) that are given by international banks during an acquisition process. “This (SOP) will facilitate timely conclusion of contracts in procurement cases involving BGs from foreign banks,” the ministry said in a statement.
The Defence Acquisition Procedure (DAP) 2020 provides right to the buyer to seek confirmation of the foreign bank’s BG from an Indian bank, where required, at the bidder’s cost. On Thursday, the SOP was issued on the steps to be followed by the buyer for seeking advice of SBI, Parliament Street Branch, New Delhi with regard to the requirement of confirmation of such BGs, the ministry mentioned.
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“If required, the confirmation of foreign bank’s BG will be through a counter-guarantee by an Indian public or private scheduled commercial bank at the bidder’s cost,” it added. The DAP 2020 allows bidders to submit various types of BGs such as advance payment bank guarantee (APBG) and performance cum warranty bank guarantee (PWBG) for discharge of various contractual obligations, it said.
“These BGs can be from any Indian public or private scheduled commercial bank (as notified by Reserve Bank of India) or first class banks of international repute,” it mentioned.Internet Explorer Channel Network