HDFC launches Electronic Bank Guarantee.

Housing Development Finance Corporation Limited (HDFC), India’s first private sector bank, launched an Electronic Bank Guarantee (e-BG) in partnership with National E-governance Services Limited (NeSL). It is the first bank in the country to issue such guarantee.

Through this bank guarantee programme, the paper based, time consuming process has been replaced with the new electronic bank guarantees that can be processed, stamped, verified and delivered instantly with enhanced security. Being a transformational change, the bank will migrate to e-BG to benefit all its customers.

The Group Head- Operations, HDFC Bank, Bhavesh Zaveri said “Digitisation is an important enabler for our vision, to be recognised as a Bank which offers a distinctive customer experience”. He claims that HDFC remain committed to designing products that make digital banking simple, contextual and highly secure.  He asserts that Digitisation of issuance of BG is a transformational step towards increasing the ease of doing business for MSMEs who are major applicants for bank guarantees. “HDFC Bank will migrate to eBG platform completely in order to expedite the issuance of BGs for our customers”.

Managing Director and Chief Executive Officer of NeSl, Debajyoti Ray Chaudhuri,  informed, “An Electronic Bank Guarantee or e-BG eliminates physical documentation usually associated with a bank guarantee, and the e-BG becomes available in a digital form to the beneficiary.” Acknowledging the association he said that it was a pleasure to be associated with HDFC Bank in implementing eBG and they are extremely happy that HDFC became the first bank to issue such an eBG using the NeSL paperless eStamping DDE platform.

E-BG has been developed in consultation with NeSL, Central Vigilance Commission-Central Bureau of Investigation Committee and Indian Bank’s Association to simplify the process and eliminate the possibility of fraud and manipulation. e-BG will be issued on the NeSL portal through an API-based digital workflow. Earlier in the paper based guarantees, it took 3-5 days to complete the process of physical pick up from the bank, courier to the beneficiary, stamp it and again to reverify it. Moreover, there was no central repository for bank guarantees till now. The e-BG Facility further enhanced security. Now, physical stamping has been eliminated with eStamping and with e BG, the applicant and beneficiary can instantly view a bank guarantee on the NeSl portal.

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