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In partnership with National E-Government Services Limited, HDFC Bank provided the country’s first e-BG (electronic bank guarantee) (NeSL). It has taken this action first in the nation among banks. Partnership with NeSL, the CVC-CBI group, and IBA led to the creation of the e-BG (Electronic Bank Guarantee). The NeSL portal will issue e-BG via a digital strategy based on APIs. The HDFC Bank will fully transition to the e-BG framework for the convenience of the ordinary public.
It was established in Aug 1994, and its main office is in Mumbai. By revenues, it is the most prominent Indian private sector bank. According to market capitalisation on the Indian stock exchanges, it is the three firms. Additionally, it is among the largest employers in India.
Key takeaways
- It provides more safety, reduced costs because there are no shipping fees, and faster-guaranteed delivery.
- Paper bank pledges must be physically picked up from the bank, sent by messenger to the beneficiaries, stamped, and then re-verified. This process takes between three and five days. The process will go more quickly with an electronic bank guarantee.
- Improve the process and eliminate the possibility of forgery and deception.
- The online bank guarantee will enable the receiver or applicant to review a bank guarantee on the NeSL platform and immediately check a bank guarantee on the NeSL platform.
- An electronic bank guarantee, or e-BG, eliminates the need for tangible papers and allows the recipient to obtain the e-BG in digital form.
- For MSMEs who regularly seek credit facilities will make doing business easier.
What is e-BG?
An electronic bank assurance replaces the conventional paperwork typically connected with a security deposit and makes it accessible to the beneficiary online. In discussion with the nest, the CVC-CBI committee, and IBA, e-bg was proposed. It was created to simplify the approach and take away the chance of fraud or fraud.
Through e-guarantees, a bank can offer to issue banks to its commercial clients and their counterparties with more convenience and security than traditional paper credit facilities. A secure certified digital message is placed on an e-bg by two authorised bank officials and is supplied as a pdf file.
Purpose of e-BG
- Advanced security is provided by e-bg, albeit at the cost of time efficiency.
- With e-bg, the applicants and beneficiaries can view a letter of guarantee right away on the nest website because stamping has replaced the physical stamping process.
- Paper-based bank assurances must be physically scooped up from the bank, delivered to the beneficiary, stamped, and re-verified within three to five days.
- There wasn’t any standard archive for credit facilities before e-bg.
- Since verifying the legitimacy of electronic documents is simple, e-guarantees offer improved security.
HDFC Bank releases India’s first e-BG
In association with NeSL (National E-Governance Services Limited), HDFC Bank, India’s largest private sector financial institution, became the first financial institution in the country to submit an Electronic Bank Guarantee (e-BG) (NeSL). The new digital bank guarantees that can be issued, certified, validated, and sent quickly with added protection have eliminated the paper-based, time-consuming process. This is a massive change, and the financial institution will switch to e-BG to understand all of its potentials.
“Digitization is a vital part of our inventive and visionary, to be regarded as a Bank that gives a particular customer experience,” said Bhavesh Zaveri, Group Head – Operations, HDFC Bank. We remain dedicated to developing services that make mobile financials simple, relevant, and secure. A significant step toward enhancing business ease for MSMEs, who are prime candidates for bank guarantees, is the digitisation of the issue of BG. To speed up the case of BGs for our possibilities, HDFC Bank will fully move to the eBG platform.
“An Electronic Bank Guarantee eliminates the physical collateral frequently associated with a bank guarantee, and the e-BG becomes available in electronic information to the recipient,” stated Debajyoti Ray Chaudhuri, MD & CEO of NeSL. It was a delight to collaborate with HDFC Bank to execute the eBG. We are delighted that HDFC Bank became the first commercial bank to submit an eBG using the NeSL automated stamping DDE framework.
Role of HDFC Bank in Digitisation
To manage and grow the bank, HDFC Bank has developed new competencies through digital factories, corporate factories, and enterprise IT. The bank’s digital strategy includes the creation of new competencies as a critical component. The bank is still committed to developing tools that make digital banking easy, accessible, and relevant.
MSMEs Receives Electronic Bank Guarantee From HDFC
In collaboration with NeSL (Nationwide E-Governance Services Limited ), private sector lender HDFC Bank has introduced an e-BG(Electronic Bank Guarantee ) to make working terms of job for MSMEs. They are frequent applicants for bank guarantees.
The old paper-based, the night before going to bed approach has been replaced with the new online bank guarantees. It may be promptly analysed, authenticated, signed, and distributed with increased security.
A bank guarantee can now be quickly viewed on the NeSL portal by the applicant and recipient thanks to e-Stamping, which has taken the place of conventional stamping.
It was a joy to work with HDFC Bank to enact e-BG, and we are thrilled that HDFC Bank became the first bank to issue an e-BG and used the NeSL paperless eStamping DDE platform. Debajyoti Ray Chaudhuri, MD & CEO of NeSL, emphasised how e-BG eradicates the physical paperwork usually associated with a security deposit.
An API-based digital procedure will be used to issue the e-BG (Electronic Bank Guarantee) via the NeSL portal.
