Bank of Baroda, a public sector bank, has announced a collaboration with National E-Governance Services Limited (NeSL), a government-backed information utility selected by India's Insolvency and Bankruptcy Board, to create the Electronic Bank Guarantee (BG) system.
The system enables the issuance of inland bank guarantees securely and conveniently through the bank’s digital platform BarodaINSTA.
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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 goal of this launch is to greatly minimise the time it takes to issue electronic bank guarantees when compared to the traditional paper-based method.
• 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.
• According to the Bank of Baroda, e-BGs will dramatically shorten the average turnaround time from 2-3 days to a few minutes. E-BGs are stored in a centralised repository, making it simple for all stakeholders to authenticate and validate documents.
• 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
