What is a Bank Guarantee?
A bank guarantee (tiếng Việt: bảo lãnh ngân hàng) is an irrevocable written undertaking issued by a bank (the guarantor) to pay a defined sum to a beneficiary should the bank's client (the applicant) default on a contractual obligation.
Types of Bank Guarantees
| Type | Vietnamese | Typical Value | Purpose |
|---|---|---|---|
| Bid Bond | Bảo lãnh dự thầu | 1–3% of bid | Ensure tenderer does not withdraw |
| Performance Bond | Bảo lãnh thực hiện HĐ | 5–10% of contract | Ensure contract completion |
| Advance Payment Bond | Bảo lãnh tiền ứng trước | 100% of advance | Protect advance disbursements |
| Customs Bond | Bảo lãnh hải quan | Per customs requirement | Secure duty/tax obligations |
| Warranty Bond | Bảo lãnh bảo hành | 3–5% of contract | Cover defect liability period |
Issuance Process
- Applicant submits guarantee request with supporting documents
- Bank assesses financial standing and collateral
- Guarantee agreement signed; collateral or cash deposit lodged
- Bank issues guarantee letter to beneficiary
Fees
Guarantee fees are determined by the issuing lender, typically 0.5–2%/year on the guaranteed amount, depending on type, tenor, and the applicant's credit rating.