Module Flow Diagram
Bank Guarantee
Functional Flow Diagram

A Bank Guarantee is a contract between Issuing Bank and Beneficiary in whose favor the guarantee has been furnished. The bank guarantee may have been issued by the banker at the instance of the client. This module covers the entire Bank Guarantee functions, BG Request to BG Return.

BG Limit Creation:

BG Limit Creation is a process to fix the BG limit for a particular Bank. This process captures bank wise BG limits during a year. The limit can be increased or decreased in the subsequent year. BG limit and LC Limits are interchangeable.

BG Limit Creation Approval:

This process is used to authorize / approve the BG Limit Creation. The user can also reject the BG Limit Creation during the approval. The system will allow defining multiple levels of authorization. System will allow user to process further flows against BG Limit Creation after the last level of approval process.

BG Limit Creation Amendment:

BG Limit Creation Amendment is a process of making the changes in the approved BG Limit Creation. Based on the Bank selection, the information will be fetched and shown from the approved BG Limit Creation. Amendment number will be running serial numbers against BG Limit Creation. BG Limit Creation Amendment process will facilitate the user to modify limit increase / decrease based on the BG Creation amount. BG limits can be adjusted against LC limits and vice versa.

BG Request:

HO/ Division/ Region/ Job will raise the BG Request. When HO/ Division / Region raise a request, it will be against a Job. In case of BG Request against EMD , Job reference will not be mentioned. BG Request will be raised for four reasons (Fresh BG Request, BG Extension BG Return and BG Conversion). Fresh BG request will be raised, if it is raised for the first time, Extension BG will be raised to extend the validity of the BG and BG Return will be raised to close the BG. BG request is raised for Mobilization Advance \ Performance \ EMD \ Security Deposit \ Retention Money \ Supply of Materials etc,. BG request can have only one type of BG (EMD/ Performance etc.) and also can have split BG amounts with different validity months aggregating to total BG amount required for a type of BG. When BG is requested on behalf of Joint Venture/ Sub Contractor/ Principal Contractor/ Subsidiary Company/ SPV, the necessary information will be mentioned in the BG request.

BG Request Approval:

This process is used to authorize / approve the BG Request. During authorization process, by invoking the detail view against BG Request, the user can view the complete details of the BG Request in view mode and based on the user privileges other operations will be allowed. The user can also reject the BG Request during the approval stage. The system will allow defining multiple levels of authorization. System will allow user to process further flows against BG Request after the last level of approval process.

After receiving the BG request from the requestor, the BG limits will be verified and the bank from whom the BG to be taken is identified

Bank Application Updation against the BG Request:

A Bank application is prepared manually with a Application number and this application number is updated in the BG request through this screen. One BG request may have more than one application. Application is also prepared for BG extension.

BG Creation:

After receiving Bank Guarantee from the bank, the details of the BG are captured in the system through this process based on the application number reference. Expire date will be calculated based on validity months from the BG request and remaining all other information will be captured from BG request. Commission type will be selected as (Full Period or Quarterly or Half Yearly or Annually). Based on the payment type selected, BG commission and commission paid date will be captured separately against the BG. After receipt of BG, the same will be forwarded to the requestor and details are captured in the system. The system also provides a facility to maintain the scanned copy of the BG. An alert will be generated and sent to JOB and concerned Division / Region for the BGs which are going to be expired.

BG Creation Approval:

Approval process will be given as like BG Request Approval.

BG Amendment Request:

BG amendment request is a process of modification of the BG. Based on the BG number selection, the information will be fetched and shown. Amendment number will be running serial numbers against BG. BG amendments are allowed on beneficiary name, Address, validity and claim period.

BG Amendment and Approval:

BG amendment is a process of modify the BG. Based on the BG amendment request selection, the information will be fetched and shown. Amendment number will be running serial numbers against BG amendment request number.

Approval Process will be given as like BG Request Approval.

BG Extension and Approval:

BG Extension is a process to extend the BG validity period. Based on the BG number selection, BG Extension request will be raised. After creation of BG Extension request, bank application number will be updated. Based on the application number selection, the information will be fetched and shown. Extended date will be displayed based on the request validity days. An alert will be generated and sent to JOB and concerned Division / Region for the BGs which are going to be expired. Approval Process will be given as like BG Request Approval.

BG Return and Approval:

BG Return is a process to close the BG. Based the BG Return Request received from the Job, BG will be returned. Approval Process will be given as like same as BG Request Approval. When a BG is closed, the BG limit against the bank will be increased to that extent.

Approval Process will be given as like BG Request Approval.

BG Invoke and Approval:

When bank intimates the details of BG invoked by the beneficiary the same is updated in the system. Based on the BG number selection, BG will be invoked. BG invocation date, remarks will be captured. Approval Process will be given as like BG Request Approval.

Margin Money and Margin Money Return:

Margin money is a process of capturing the FDR taken against a BG. Deposit number (FDR), deposit date, deposit amount, maturity date, maturity amount, rate of interest will be captured. Replaced FDR number will be captured, if any, previous number against the current deposit number (FDR). On maturity, FDR will be closed and the same is captured through Margin Money Return process. Return date, interest amount, TDS amount, Net amount and credit date will be captured.

BG Commission Updation:

If commission payment mode is not “full payment”, then commission will be paid periodically based on the term decided during the issue of BG. Based on the term the payment schedule will be generated automatically and the payment date and voucher details are captured when it is paid.


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