Guarantees constitute a bank promise to pay in case of default by its customers. Samba issues a whole range of guarantees to meet your financial requirements .
Standby Letters of Credit
A standby is a distinguished letter of credit, which is irrevocable, independent documentary and a binding undertaking that may support payment upon a default in performance, money borrowed, advanced or upon the occurrence or non-occurrence of another contingency. It could also be used in place of letters of guarantee that are payable on demand.
Letters of Guarantee
Letters of Guarantee are issued by Samba (the bank) as another important tool of international or local trade. This constitutes a promise by the Bank (guarantor) to pay a stated amount of money to the beneficiary (obligee) if its customer (principal) defaults in his debt or obligation to the obligee.
The purpose of the bid bond (guarantee) is to provide an assurance of intention of the party submitting the bid to sign the contract if his/her bid is accepted. The guarantee covers a percentage of the bid price.
The purpose of the performance guarantee is to safeguard the beneficiary against a default under a contract obligation by the party to whom the contract was awarded. The guarantee covers a percentage of the value of the contract.
In many projects, project owners are willing to make certain advance payments to the contractor. The advance payment bond guarantees the repayment of advances made by the project owner in the event of the contractor's default under the contract.
These bonds are meant to cover other payment obligations (e.g. payments under car sales on installment basis, etc.)
The purpose of a retention bond is to safeguard against project deficiencies found upon completion and prior to the final acceptance of work.
These bonds are issued in favor of the Department of Customs as a security for the settlement of the importer's custom dues.
Zakat & Income Tax
These bonds are issued in favor of the Department of Zakat and Income Tax as a security against the payment of outstanding income tax, delay penalty and legal zakat.
Special Text Guarantees
They are tailor-made guarantees, which are structured in accordance with customers' specific requirements.
Samba can advise a guarantee to a beneficiary in Saudi Arabia based on a foreign bank's request. The bank's responsibility is limited to the authenticity of the instrument and beneficiary's advice without delay.
Samba can issue bonds subject to the receipt of an acceptable counter-guarantee issued by another bank (domestic or foreign). The acceptability of the counter-guarantee is subject to the bank's internal policy and procedure.