The HDFC Bank, the largest private sector bank in India, became the first bank in the country to issue an Electronic Bank Guarantee (e-BG).
About the e-BG
- The HDFC bank recently launched the first-ever Electronic Bank Guarantee (e-BG) in collaboration with the National E-Governance Services Limited (NeSL).
- The e-BG was developed in consultation with the NeSL, CVC-CBI committee and Indian Banks’ Association (IBA).
- e-BG has been developed to simplify the process and eliminate the possibility of fraud and manipulation.
- e-BG will be issued on the NeSL portal through an API-based digital workflow.
- e-BG removes the need for the paper-based time consuming process, which often takes 3 to 5 days for complete due to the need for physical pick up from the bank, delivery of courier to the beneficiary, stamping and reverification.
- e-BG boosts efficiency and security, while enabling the beneficiary to instantly view a bank guarantee on the NeSL portal.
- Digitisation of the overall bank guarantee process ensures ease of doing business for MSMEs, who are the major applicants for bank guarantees.
About National E-Governance Services Limited (NeSL)
- The National E-Governance Services Limited (NeSL) is India’s first Information Utility.
- It is registered with the Insolvency and Bankruptcy Board of India (IBBI) under the aegis of the Insolvency and Bankruptcy Code, 2016.
- It was set up by leading banks and public institutions and is incorporated as a union government company.
- It serves as a repository of legal evidence having information about debt or claim submitted by the financial or operational creditor and verified by parties to the debt.