Know all about E-Bank Guarantee and its rising popularity among banks
1 min read 24 Mar 2023, 02:09 PM ISTRecently, Yes Bank joined the list of lenders who have opted for electronic bank guarantee to ease the process for business owners. e-BG will shorten the process of lending from 3-4 days to few minutes. Know all about e-BG here
PremiumYes Bank launched its first of its Electronic Bank Guarantee (e-BG) on Thursday in a pact with National E-Governance Services Limited (NeSL). The move by Yes Bank has been followed by SBI, Indian Overseas Bank, etc.
The issuance of e-BG eliminates the physical documentation which is associated with bank guarantee. The move also reduces the turn-around time of the BG issuance and delivery to the beneficiary from an industry average of 3-4 working days to a few minutes.
What is e-BG?
Electronic Bank Guarantee is the electronic process of issuing a guarantee to a lender. The digitisation of the process will cut short the BG issuance time from 3-4 working days to a few minutes.
Why are banks opting for e-BG?
With a huge focus on digitalisation, e-BG appears to be an attractive way of subsituting paper-based guarantees. The electronic version of guarantee can be processed, stamped, verified and delivered instantly, compared to paper-based process. Moreover, conventional process takes a lot of time compared to the digital process. To obtain e-BG, companies or individuals have to go for text-generation of the BG, e-stamping by NeSl, e signing and hosting of the final e-bg on the NeSl portal. The final e-BG can be viewed by the applicant on the NeSL portal. The digital process not only saves time, but also eliminates fraud or manipulation.
Steps included in Electronic Bank Guarantee application
-Application
-Preview and confirmation
-Paperless e-stamping, e-signing
-Hosting of the final electronic BG on the NeSL portal
-Intimation of final BG to the beneficiary
Key Features of e-BG
-Completely digital process which eliminates the use of paper.
-National E-govern-NeSl becomes the central repository of electronic bank guarantee. Any e-BG issued is stored centrally in NeSL Information Utility repository apart from storage by the respective issuing banks.
-Easy transmission of e-BG
-All the updates related to e-BG are directly notified by NeSl to beneficiary and other parties.
Benefits of e-BG
-With the the efforts of maximising digitisation to ease the process, eBG will bring ease of doing business for all stakeholder.
-It will reduce delays
-It will make the process of verification easier.
-People would be able to get alerts before expiry.
-Widen the scope of better customer service.
