Bank of Baroda launches Electronic Bank Guarantee
Bank of Baroda, a public sector bank, has announced its partnership with National E-Governance Services Limited (NeSL), a government-backed information utility appointed by the Insolvency and Bankruptcy Board of India, to launch the Electronic Bank Guarantee (BG) system.
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The system enables the issuance of inland bank guarantees securely and conveniently through the bank’s digital platform BarodaINSTA.
Bank of Baroda launches Electronic Bank Guarantee: Key Points
- This system is entirely digital, which reduces turnaround time and ensures a safer and more accessible medium.
- Upon issuance, the beneficiary can view the final digital BG immediately on the NeSL portal, eliminating the need for a separate BG issuing Bank authentication.
Electronic Bank Guarantee by Bank of Baroda: Aim
- The aim of this launch is to significantly reduce the turnaround time for issuing electronic bank guarantees compared to the conventional paper-based process.
- The Bank expects the new system to bring down the average turnaround time for a conventional BG from 2-3 days to just a few minutes.
Why is launching an Electronic bank guarantee important?
- The reason for launching electronic bank guarantees is to provide a faster turnaround time compared to the traditional paper-based process of issuing inland bank guarantees.
- The Bank of Baroda claims that e-BGs will significantly reduce the average turnaround time from 2-3 days to a few minutes. E-BGs are stored in a central repository, making it easy to authenticate and verify documents for all stakeholders.
- e-BGs are a transformative reform that simplifies banking, enhances security and accessibility for customers.
- Contractors, SMEs, and large corporations frequently apply for bank guarantees, and the move to e-BGs will benefit all, providing a quick, seamless, transparent, and entirely secure process.
- In addition to the Bank of Baroda, other banks like HDFC, SBI, Yes Bank, and Federal Bank offer e-BG facilities.
Important Takeaways For All Competitive Exams
- MD & CEO of NeSL: Debajyoti Ray Chaudhuri
- RBI Governor: Shaktikanta Das
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