In partnership with National E-Governance Services Limited (NeSL), HDFC Bank, India’s largest private sector bank, issued the country’s first Electronic Bank Guarantee (e-BG).
Using the new electronic bank guarantees, the paper-based, time-consuming process has been eliminated. The bank guarantees can be processed, stamped, verified, and delivered instantly and with enhanced security.
This is a transformational change, and the Bank will migrate to e-BG to benefit all its customers.
“Digitisation is an important enabler for our vision, to be recognised as a Bank which offers a distinctive customer experience. We remain committed to designing products that make digital banking simple, contextual, and highly secure. Digitisation of issuance of BG is a transformational step towards increasing the ease of doing business for MSMEs who are major applicants for bank guarantees. HDFC Bank will migrate to eBG platform completely in order to expedite the issuance of BGs for our customers,” said Bhavesh Zaveri, Group Head – Operations, HDFC Bank.
“An Electronic Bank Guarantee or e-BG eliminates the physical documentation usually associated with a bank guarantee, and the e-BG becomes available in a digital form to the beneficiary. It was a pleasure to be associated with HDFC Bank in implementing eBG and we are extremely happy that HDFC Bank became the first bank to issue such an eBG using the NeSL paperless eStamping DDE platform,” said Debajyoti Ray Chaudhuri, MD & CEO of NeSL.
It takes 3-5 working days for paper-based bank guarantees to complete the process of physical pick up from the bank, delivery by courier to the beneficiary, stamping, and re-verification.
In place of physical stamping, eStamping has been substituted for eBG, which allows the applicant and beneficiary to view bank guarantees on the NeSL website immediately.
Besides there was no central repository for bank guarantees until now. As well as enhancing security, eBG provides efficiency in terms of time.
To simplify the process and eliminate the possibility of fraud and manipulation e-BG has been developed in consultation with NeSL, CVC-CBI committee and IBA. A digital workflow based on APIs will be used to issue e-BGs on the NeSL portal.
The bank’s digital strategy is based on the development of new competencies. HDFC Bank has been building new competencies through Digital Factory, Enterprise Factory and Enterprise IT to both run and build the Bank.