Payment and performance guarantees

Bank guarantee for payment, performance of contractual obligations or return of advance payments.

Pivdenny Bank issues:

Payment guarantees — the obligation of the bank to pay an amount to the seller if the buyer violates the terms of the contract and did not pay by the date stipulated in the contract.

Performance guarantees – the obligation of the bank to pay the buyer a specified amount if the seller does not meet his contractual obligations.

Prepayment guarantees – the obligation of the bank to pay the buyer the advance payment paid to the seller under the contract, if the seller does not meet the contractual obligations for the delivery of goods/services or refuses or is unable to return the advance payment.

Advantages of bank guarantees:

  • The possibility for buyers to get a deferred payment clause (trade credit) from their counterparties.
  • The possibility to make sure advance payments are returned to the buyer if the seller defaults on contract commitments.
  • Minimise the risk of non-fulfilment of the contract by the counterparty.
  • A more cost-effective financial instrument compared to lending or factoring.


The main conditions for issuance of guarantees by Pivdenny Bank:

Requirements for clients–principals under the guarantee:

  • have been in business for more than 12 months.
  • a stable financial position.

Maximum term of the guarantee – no more than the contractual term to meet the obligations which are being guaranteed.

Currency - UAH, USD, EUR.

Form of issue of the guarantee:

  • paper;
  • electronic form with EDS;
  • a SWIFT message.

Collateral – funds on the coverage account or collateral may be real estate; vehicles; goods in circulation; property rights to funds on deposit accounts, etc.

The bank decides on guarantees within 5 working days from the time the full package of documents is submitted.

Fee for guarantee issuance
Issuance fee for guarantees in Hryvnia
0.2 % of the guarantee amount (min. UAH 1,000 - max. UAH 10,000)
Issuance fee for a guarantee in foreign currency
0.2 % of the guarantee amount (min. USD 100, max – USD 1,000) (in UAH, according to the NBU exchange rate)
The fee for the guarantee in Hryvnia during its life-time
With a cash pledge
2 % per year
With pledge of real estate
3 - 3.5 % per year
With pledge of equipment, vehicles
4 - 4.5 % per year
With pledge in the form of goods in circulation
from 5 % per year
With other pledges
negotiable
The fee for the guarantee in foreign currency during its life-time
The fee for the guarantee
negotiable
Fee to change the duration or conditions of the guarantee
Increase of the guarantee amount in Hryvnia
0.2 % of the amount paid (min. UAH 1,000 - max. UAH 10,000)
Increase of the guarantee amount in the foreign currency
0.2 % of the amount (min. USD 100, maximum – USD 1,000) (in UAH, according to the NBU exchange rate)
Extension of the duration of the guarantee = in Hryvnia
UAH 1,000
Extension of the duration of the guarantee in a foreign currency
USD 100 (in UAH, according to the NBU exchange rate)
Other changes to the terms and conditions of the guarantee in Hryvnia (including cancellation at the client’s request)
UAH 500
Other changes to the terms and conditions of the guarantee in foreign currency (including cancellation at the client’s request)
USD 50 (in UAH, according to the NBU exchange rate)
Fees on other guarantee operations
Review of payment request and actual payment under the guarantee in Hryvnia
0.2 % of the amount paid (min. UAH 1,000 - max. UAH 5,000)
Review of payment request and actual payment under the guarantee in a foreign currency
0.2 % of the amount (min. USD 100, maximum – USD 500) (in UAH, according to the NBU exchange rate)
Advising notices received under the guarantee in Hryvnia
UAH 250
Advising notices received under the guarantee in foreign currency
USD 50 (in UAH, according to the NBU exchange rate)
Giving notice (investigation under the guarantee in Hryvnia) to other banks at the client’s request
UAH 500
Giving notice (investigation under the guarantee in foreign currency) to other banks at the client’s request
USD 50 (in UAH, according to the NBU exchange rate)

Procedure for issuing a bank guarantee:

  1. The client submits the required package of documents.
  2. Based on this package, the Bank determines the possibility to issue the guarantee.
  3. If the issuance is duly approved by the bank, contracts are signed on the guarantee and any other required collateral agreements with the client. If the guarantee is issued against 100 % cash coverage by the client, the contract for the guarantee is singed directly.
  4. The bank issues the guarantee on paper to send it directly to the beneficiary or to the client to send on to the beneficiary, or sends an electronic copy of the guarantee via the ProZorro system, or sends it as a МТ760-format message via SWIFT system to the beneficiary’s bank for further transfer to the beneficiary.

How do I apply?

  • Order online

    Submit your application and our manager will contact you to schedule an appointment.

  • Contact your personal manager

    for existing clients of the bank.

FAQ

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