Covering Letter for Submission of Bank Guarantee (Sample)

In order to comply with the terms of a contract, a party may be required to submit one or more bank guarantees to the other party before commencement of the work as agreed.

A bank guarantee is an agreement between three parties, i.e. the bank and another two parties, wherein one party seeks the bank guarantee from the bank and after receipt of the approval from the bank, the said party gives the bank guarantee document to the other party. Here, the bank agrees to pay a specified amount as mentioned in the bank guarantee to the party to whom bank guarantee is given.

Important thing about a cover letter for bank guarantee submission is to mention clearly (1) the details of the bank guarantee number, date and amount, (2) the agreement number and date and (3) the details of the tender. The copy of the cover letter will be helpful for future reference.

Here is a format of a covering letter while sending across the bank guarantee could be used.

TEMPLATE

(To be printed on the letterhead of the company)

Ref. No.: .................

Date: .......................

To

(Name of the Officer)

(Designation)

(Name of the Organization

to which bank guarantee given)

(Address) (Phone Number)

Sub.: Submission of original Bank Guarantee

Ref: (1) Tender no. ........... dated ............

        (2) Agreement no. ............ dated ...........

Dear Sir/Madam,

We are enclosing herewith an original Bank Guarantee bearing number ................. for (Amount) issued by (Name of the Bank) in favor of (Name of the Organization) in compliance of the terms of the agreement between our organizations i.e. (Name of Party #1) and (Name of Party #2) by agreement no. ............... dated ............... as required under clause no. ..... of the said agreement and Tender no. ............. dated ........... issued by your organization.

We hereby agree and consent that your organization shall have an irrevocable and unconditional authority to invoke the said bank guarantee at any time with prior notice to us for violation of contract terms by us.

We request you to kindly grant us the Commencement Certificate to enable us to start the work at the earliest.

Kindly acknowledge the receipt and oblige.

Thanking you,

Yours faithfully,

For (Name of the Organization),

        (Signature)                                        (Official Seal/Stamp)

(Name of the Authorized Signatory)

(Designation)

Encl.: As above