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Bank Guarantee For Deposit for Philippines

Bank Guarantee For Deposit Template for Philippines

A Bank Guarantee For Deposit is a financial instrument issued under Philippine banking law where a bank provides a guarantee to a beneficiary regarding the payment obligations of a principal (customer). The document, governed by Philippine law and regulated by the Bangko Sentral ng Pilipinas, serves as a security instrument ensuring that the beneficiary will receive payment up to the guaranteed amount if the principal fails to meet their deposit obligations. This guarantee typically includes specific terms regarding the trigger events for payment, claim procedures, and validity period, all structured in compliance with Philippine banking regulations and the General Banking Law of 2000.

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What is a Bank Guarantee For Deposit?

The Bank Guarantee For Deposit is a crucial financial instrument in the Philippine banking sector, commonly used in various commercial transactions where significant deposits need to be secured. This document is typically required in situations where a party (the beneficiary) requires security for a deposit payment from another party (the principal), such as in property leasing, major purchase agreements, or project tenders. The guarantee, issued under Philippine law and supervised by the Bangko Sentral ng Pilipinas, provides assurance that the deposit amount will be paid by the bank if the principal defaults on their obligations. The document includes specific details about the guaranteed amount, validity period, conditions for calling on the guarantee, and claim procedures, all structured to comply with local banking regulations and practices. It serves as a risk mitigation tool, particularly valuable in high-value transactions where parties seek additional security for their deposit arrangements.

What sections should be included in a Bank Guarantee For Deposit?

1. Parties: Identifies the three key parties: the Bank (Guarantor), the Principal (Customer), and the Beneficiary

2. Background: States the context of the guarantee, including the underlying transaction or relationship between the Principal and Beneficiary

3. Definitions: Defines key terms used throughout the guarantee document

4. Guarantee Amount: Specifies the maximum amount of the guarantee and the currency

5. Scope of Guarantee: Details what the guarantee covers and the conditions under which it can be called upon

6. Duration and Validity: Specifies the effective date, expiry date, and any conditions affecting the guarantee's validity

7. Demand Requirements: Outlines the process and requirements for making a claim under the guarantee

8. Payment Terms: Specifies how and when payment will be made following a valid demand

9. Bank's Rights and Obligations: Details the rights, obligations, and limitations of the bank's liability

10. Governing Law and Jurisdiction: Specifies Philippine law as governing law and defines jurisdiction for disputes

11. Notices: Specifies how formal communications between parties should be made and delivered

What sections are optional to include in a Bank Guarantee For Deposit?

1. Counter-Indemnity: Required when the Principal must provide indemnity to the bank; typically included for higher-value guarantees

2. Assignment Restrictions: Include when transfer or assignment of the guarantee rights needs to be restricted

3. Foreign Currency Provisions: Required when the guarantee amount is in a currency other than Philippine Peso

4. Step-In Rights: Include when the bank requires the right to step into the underlying transaction in case of default

5. Multiple Beneficiaries: Required when there is more than one beneficiary under the guarantee

6. Reduction Clauses: Include when the guarantee amount can be reduced over time or upon certain events

What schedules should be included in a Bank Guarantee For Deposit?

1. Schedule A - Form of Demand: Template for making a valid demand under the guarantee

2. Schedule B - Supporting Documents: List of required documents to be submitted with a demand

3. Schedule C - Bank Account Details: Payment account details for the beneficiary

4. Appendix 1 - Copy of Underlying Agreement: Reference copy of the agreement or transaction being guaranteed

5. Appendix 2 - Corporate Authorizations: Copies of corporate approvals and authorizations from all parties

6. Appendix 3 - BSP Compliance Documents: Documents required for compliance with Bangko Sentral ng Pilipinas regulations

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Bank Guarantee

Sector

Banking

Cost

Free to use
Relevant legal definitions










Clauses






























Relevant Industries

Banking and Financial Services

Real Estate and Property Development

Construction

Manufacturing

Retail

Telecommunications

Energy and Utilities

Infrastructure Development

International Trade

Commercial Leasing

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Banking

Trade Finance

Credit Risk

Commercial Banking

Corporate Secretariat

Relevant Roles

Chief Financial Officer

Treasury Manager

Risk Management Officer

Legal Counsel

Corporate Banking Officer

Credit Risk Manager

Commercial Banking Manager

Compliance Officer

Financial Controller

Corporate Secretary

Account Relationship Manager

Trade Finance Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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