PROCEDURE TO ISSUE INWARD GUARANTEE TO LOCAL BENEFICIARY BASED ON A COUNTER

GUARANTEE RECEIVED FROM ABROAD (DIRECT OR INDIRECT) Hibret Bank can issue guarantees based
on foreign banks request usually correspondent banks 1. The Buyer/Importer/Beneficiary puts
tender/award tender/pay an advance payment. 2. The Exporter/Seller/Applicant agrees to issue a
guarantee and requests issuance of the guarantee to his/her/its bank. 3. Applicant/Correspondent bank
checks the credit worthiness of the Exporter and agrees to issue the guarantee. 4.
Correspondent/Applicant bank issues the guarantee directly to the Buyer/Importer/Beneficiary, if
acceptable. Then Hibret Bank will advise same to the Buyer/Importer/Beneficiary without responsibility.
(Refer the definition of Direct Guarantee) 5. If Correspondent/Applicant bank issues the guarantee with
our (Hibret Bank) responsibility or indirect guarantee; review the content of the message thoroughly
and check the following conditions • Authentication of the SWIFT message Creditworthiness of
instructing bank (usually our correspondent bank) otherwise the instructing bank shall deposit 100% of
guarantee amount • Value/Amount of Currency • Name of Beneficiary • Name of Applicant • Purpose of
the guarantee • Type of guarantee • Validity date/Expiry date • Undertaking- the instructing bank must
include a clause which states the undertaking to the issuing bank to honor if any claim present within
the validity date without any contestation by any party. • To whom we shall deliver the guarantee •
Who will pay Hibert Bank's charge (usually the instructing bank) • Any other condition stipulated in the
message acceptable by the issuing bank and/or beneficiary 6. If there is any discrepancy, then request
the instructing bank/Correspondent Bank to amend the discrepant item by SWIFT. 7. After receiving the
amendment from the instructing bank/Correspondent Bank, issue the guarantee to local Beneficiary. 8.
The guarantee can be issued either by using the standard format developed for this purpose by Hibret
Bank or based on the instruction of the counter guarantor bank. 10. Book the contract on flex cube core
banking system. 61

11. Deliver the guarantee to the person who is authorized to collect the guarantee against verification
and signature. 12. Claim charges and commission based on the banks Tariff Book from Instructing Bank.
13. Follow up timely settlement of charges and commissions.