Key features of electronic bank guarantee (e-BG)

Just as the name tells, Electronic Bank Guarantee (e-BG) is the Guarantee issued by the banks on behalf of their customers in digital form. The issuance of electronic bank guarantees completely eliminates papers in the process.

The Guarantee issuing bank shall integrate its internal system with the Digital Document Execution (DDE) platform of NeSL (National E-Governance Services Ltd) for issuance, amendments, and various life cycle stages of the e-Bank Guarantee.

 In the e-stamping of e-BG, no need to print stamp paper. The bank is required to maintain a Digital Ledger (DL) with NeSL and top-up the DL with sufficient funds. Stamp Duty amounts, where applicable, are automatically deducted from the available balance in the DL before stamp procurement.  Banks should follow their existing process for determining jurisdiction and applicable stamp value. Here, NeSL will only facilitate the procurement of digital stamping based on requests received from the bank.

Banks, beneficiaries, and applicants can continue to use the present documentation templates, as they do not have restrictions to impose any standardized BG template. BG document embedding digital stamp as a composite electronic (PDF) document.

BG document will be digitally signed by bank officials as permitted under the Information Technology Act which prevents tampering with any part of the document since it will invalidate the signature. The neSL-DDE platform has the capability to execute the documents electronically using Aadhaar eSIGN (OTP and Biometric) and DSC (dongle-based Digital Signature).

Any e-BG issued is stored centrally in NeSL Information Utility repository apart from storage by the respective issuing banks.  Any subsequent event of the BG, e.g. amendment, invocation, cancellation/closure is also recorded with NeSL on confirmation from the issuing bank.

NeSL sends a direct notification to the registered e-mail id of the beneficiary and other parties on issuance or change of status for each e-BG. NeSL maintains the delivery status of email notifications and also the audit trail for the download of e-BG by the beneficiary. This information will also be made available on NeSL portal. Even if the email is missed out or not delivered for any reason, the beneficiary can still access e-BG directly from NeSL portal under its login. For this, suitable MIS may also be planned for bank usage. This system will eliminate the reliance on SFMS messages earlier used for the purpose.

e-BG process through NeSL facilitates beneficiaries to submit requests for invocation or any other consents through digitally signed submission in NeSL portal. Since no original is to be returned by the beneficiary, the beneficiaries and their authorized representatives are required to register with NeSL before submitting such electronic requests. Thus, where the such electronic request is received through NeSL, they can be treated as authentic and verifiable.

NeSL also allows beneficiaries, as verified users of NeSL, to issue discharge letters/confirmations or invocation advice through NeSL platform. All connected parties, i.e. beneficiary, the applicant (customer), and the bank have the ability to access NeSL platform directly for searching, viewing, and downloading eBG, anytime. No fees are applicable currently for the beneficiary or applicant for registration or access in NeSL.

The e-BG process is essentially a fully digital one. In the case of states where stamp paper is available only in physical mode, banks may continue to issue BG in traditional paper mode outside of NeSL system, until such states also transition to digital stamping.

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