Bank Guarantees

Bank guarantee is an obligation of bank to pay the guarantee (beneficiary) an amount of money specified in the guarantee document, if the guarantor – bank customer has failed to fulfil its liabilities under the guarantee document


Main types of bank guarantees and when they are issued:

  • payment Guarantee – ensures timely payment to supplier/contractor for delivered goods/ completed work within the framework of contract;

  • bid Bond – ensures execution of tenderer liabilities in accordance with tender regulations;

  • performance Guarantee – ensures observation of purchaser/customer complaints if seller/performer has failed to comply with contract provisions;

  • for participation in tenders organised by public entities, municipalities, or other organisations (tender guarantee, proposal guarantee, performance guarantee, etc.);

  • import/export operations (payment guarantee, performance guarantee, advance payment guarantee, customs surety);

  • fulfilment of other obligations.

Three Simple Steps to Arrange for Bank Guarantee


Familiarize oneself with Bank Price List and submit an application for bank guarantee.


Provide sufficient funds in the settlement account or deposit account for issue of bank guarantee and payment of bank fees.


Sign the Bank provided Agreement for Bank Guarantee and Financial Collateral Agreement.

Why are PrivatBank guarantees beneficial?

  • prompt issue of guarantee – cash-backed bank guarantee is issued within one business day;

  • low bank fees;

  • individual approach to arrangement of guarantee in view of customer`s type of business;

  • qualified advice during preparation of contract; establishment of the most effective settlement method by bank guarantee;

  • PrivatBank international guarantees are regulated by Uniform Rules for Demand Guarantees of International Chamber of Commerce.

  • Advantages of Bank Guarantees:

    guaranteed fulfilment of contractual obligations without making pre-payment;

  • possibility to receive business partner`s commercial loan whose costs are lower than costs of credit institution credit facilities;

  • payment guarantee by virtue of written request only covers actually supplied goods;

  • option to suspend payment for delivery of goods or service as stipulated by contract.