HDFC Bank issues first Electronic Bank Guarantee in India

HDFC bank has become India’s first bank to issue an Electronic Bank Guarantee (e-BG) in partnership with National E-Governance Services Limited (NeSL). The bank plans to migrate to the e-BG platform completely to expedite the issuance of BGs for the customers.

HDFC Bank issues first Electronic Bank Guarantee in India
HDFC Bank issues first Electronic Bank Guarantee in India

HDFC bank becomes the first bank in India to issue an Electronic Bank Guarantee (e-BG) in partnership with National E-Governance Services Limited (NeSL). e-BG will be issued through an API- based digital workflow on the NeSL portal. 

The group head in operations of HDFC bank said that digitization is an essential enabler for their vision, to be recognized as a Bank that offers a distinctive customer experience. Digitization of issuance of bank guarantees is a transformational step toward increasing the proficiency of doing business for MSMEs who are important applicants for bank guarantees. 

To expedite the issuance of BGs for the customers, HDFC Bank will migrate to the e-BG platform completely.

What is e-BG?

  • Electronic Bank Guarantee eliminates the physical documentation associated with a bank guarantee and it becomes available digitally to the beneficiary.
  • e-BG has been introduced in consultation with NeSL, the CVC-CBI committee, and IBA.
  • It has been developed to simplify the process and eliminate the possibility of fraud and manipulation.
  • A bank can provide bank guarantees to its business customers and their counterparties faster and safely through e-guarantees than traditional paper bank guarantees. 
  • An e-BG is issued as a PDF file with a secure qualified electronic signature placed by two authorized bank representatives.

What is the significance of e-BG?

  • e-BG offers advanced security, bringing inefficiency of time.
  • eStamping has replaced physical stamping and with e-BG, the applicant and beneficiary can immediately view a bank guarantee on the NeSL portal.
  • Paper-based bank guarantees take 3-5days for completing the physical pick process from the bank, courier to the beneficiary, stamp it, and re-verify it. 
  • Before e-BG, there was no central repository for bank guarantees.
  • E-guarantees deliver increased safety because the authenticity of electronic signatures can be easily checked. 

HDFC bank’s role in digitization

Through Digital Factory, Enterprise Factory, and Enterprise IT, HDFC bank has been building new competencies to both run and expand the bank. Developing new competencies is an important element of the bank’s digital strategy. The bank remains committed to designing products to make digital banking simple, secure, and contextual.

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FAQ

Which bank has become the first to offer an Electronic bank Guarantee in India?

HDFC Bank has become the first to offer an electronic bank guarantee in India.

HDFC Bank has issued e-BG in collaboration with which organization?

HDFC bank has issued an Electronic Bank Guarantee (e-BG) in partnership with National E-Governance Services Limited (NeSL).

What is e-BG?

Electronic Bank Guarantee(e-BG) eliminates the physical documentation associated with a bank guarantee and it becomes available digitally to the beneficiary. It simplifies the process and eliminates the possibility of fraud and manipulation.

What is the significance of e-BG?

e-BG offers advanced security, bringing inefficiency of time. E-guarantees deliver increased safety because the authenticity of electronic signatures can be easily checked.

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