Ease of Doing Business for MSMEs: The new facility will enable the public sector bank to issue inland bank guarantees electronically on its digital platform BarodaINSTA.
Ease of Doing Business for MSMEs: Bank of Baroda announced the launch of the Electronic Bank Guarantee (BG) system in partnership with National E-Governance Services Limited (NeSL), the government-backed Information Utility appointed by the Insolvency and Bankruptcy Board of India.
The new facility will enable the public sector bank to issue inland bank guarantees electronically on its digital platform BarodaINSTA.
Being entirely digital, the system will reduce the turnaround time in the process and provide a safer and more accessible medium, claims the Bank. The beneficiary can view the final digital BG on the NeSL portal immediately upon issuance. Such an e-BG eliminates the need for a separate authentication from the BG issuing Bank.
The rationale behind the launch is the faster turnaround time in offering an electronic bank guarantee versus the conventional paper-based process of issuing inland Bank Guarantees. The bank claims that e-BGs will bring down the average turnaround time of a conventional BG from 2-3 days to just a few minutes.
Moreover, e-BGs are stored in a central repository, unlike inland BGs, which are accessible to all stakeholders making it easy to authenticate and verify documents.
“Electronic Bank Guarantee is a transformational reform as we endeavor to make banking simpler, more secure, and easily accessible for our customers. Individual contractors, SMEs, and large corporates are major applicants for bank guarantees and the move to e-BGs – a quick, seamless, transparent, and completely secure process – will benefit them all,” said the bank’s General Manager and head of Forex and Fee income T. N. Suresh.
Debajyoti Ray Chaudhuri, MD & CEO of NeSL said, “Over the past few years, India has built a robust digital infrastructure and is driving growth across all sectors in the economy…. NeSL’s e-BG meets a long-standing requirement of the banking industry for a digital product that addresses the challenges in the physical process of issuance of e-BGs.”
Other than the Bank of Baroda, banks like HDFC, SBI, Yes Bank, and Federal Bank also provide e-BG facilities.