|
Please refer to instruction contained in BPRD Circular No.7
dated April 4, 2000, in terms of which banks were allowed to
issue open-ended guarantees without clearance from the State
Bank of Pakistan, provided they have fully secured their interest
by cash collateral or other liquid securities against issuance
of such guarantees for the following purposes:
¨ Advance
payments/bid bond guarantees - guarantees against performance
of ongoing Government, Semi Government & Autonomous Bodies
Contracts.
¨
Guarantees requested by public utility companies such as gas,
electricity etc. in respect of their customers to cover the
utility supplied during the period of guarantee.
¨
Court Guarantees.
¨
Customs/Shipping guarantees.
¨
Revenue related Government Departments’ guarantees.
Banks are also permitted to seek prior approval of State Bank
of Pakistan for issuance of open ended guarantees for purposes
other than the ones mentioned above, on case to case basis.
2.
Despite above relaxation, it has come to the notice of the
State Bank of Pakistan that customers of banks face difficulty
in arranging cash and liquid securities, which impedes trade
and businesses. In order to facilitate the trade and industry,
it has now been decided to permit banks to issue open-ended
guarantees on behalf of their clients by securing their interest
fully through easily realizable securities acceptable to them
instead of cash and liquid securities.
Please
acknowledge receipt.
|
