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Corporate Banking

Performance Bond

Introduction

It refers to the written document which our bank issues to the owner or the buyer at the request of the project contractor or of the supplier of goods, so as to guarantee that the contractor or the supplier strictly fulfills the contractual obligations.


Scope of application

It's applicable to a very broad range, available for the situation that the security is provided for the parties to fulfill contractual obligations in any projects, and commonly used for project contracting, material procurement and other projects.


Features

1. In project contracting, material procurement and other projects, the owner or the buyer usually requires the contractor or the supplier to pay a performance bond margin to restrict the behavior of the opposite, for the purpose of avoiding non-performance of contractual obligations by the contractor or the supplier, which causes losses to the owner or the buyer. The performance bond is a good alternative for cash deposits.

2. For the contractor or the supplier:

To reduce the long-time occupation of funds arising from the payment of cash deposits, and obtain capital gains;

Can obtain optimized allocation of limited funds as compared with the payment of cash deposits;

3. For the owner or the buyer

To reasonably restrict the behavior of the contractor and the supplier, and safeguard its own interests well;

To avoid the tediousness of deposit collecting and refunding procedures, and improve work efficiency.


(Note: For details, please call 961 111 or come to the nearby GRCB outlet.)

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