New Delhi: India today said it has put in place simplified procedures for guarantees of foreign banks submitted by defence contractors during tenders, to speed up military acquisitions.
“The Acquisition Wing of (the) Ministry of Defence (MoD) has promulgated a Standard Operating Procedure (SOP) to facilitate clarity in procedure to be followed by the Buyer in respect of Bank Guarantees submitted by the bidders from international banks. This will facilitate timely conclusion of contracts in procurement cases involving Bank Guarantees from foreign banks,” according to a statement from the MoD.
For Bank Guarantees from international banks, the Defence Acquisition Procedure 2020 provides the right to the Buyer to seek confirmation of the BG from an Indian bank, where required, at bidder’s cost.
A Standard Operating Procedure has been issued on the steps to be followed by the Buyer for seeking advice of State Bank of India branch on Parliament Street in New Delhi with regard to the requirement of confirmation of such Bank Guarantees.
“If required, the confirmation of foreign bank’s Bank Guarantees will be through a counter-guarantee by an Indian Public or Private Scheduled Commercial Bank at the bidder’s cost,” the statement said.
The Defence Acquisition Procedure 2020 provides for submission of various Bank Guarantees (BGs), namely, Advance Payment Bank Guarantee (APBG), Additional Bank Guarantee (ABG), and Performance-cum-Warranty Bank Guarantee (PWBG) by the Sellers for discharge of various contractual obligations.
These Bank Guarantees can be from any Indian Public or Private Scheduled Commercial Bank (as notified by the Reserve Bank of India) or First Class banks of international repute.