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Terms And Conditions

Letter of Guarantee Terms and Conditions


By signing the application form, you agree to:

Remain obligated by the T&Cs of the letter of guarantee(s) ('LG') issued based on our request until the LG is treated as cancelled/fully discharged.

Irrevocably indemnify SIB (and its subsidiaries and representatives) against all claims, charges, legal fees, losses, damages, costs, including without limitation, settlements, liability, suits, judgments, demands) and expenses of whatsoever nature, resulting from, or in connection with the issuance, amendment, renewal, revocation or liquidation of the LG.

Authorize SIB, at any time, to debit our account against all amounts including charges and any applicable fees which may at any time be payable in connection to any claims/demands received under this LG issued by SIB or by SIB correspondent bank, in addition to any expenses, legal costs, and lawyers' fees that may be incurred by SIB.

Authorize SIB at any time during the validity of the LG(s) to claim/secure SIB for the full cover of the LG(s) amount in case it is not fully covered or SIB desired or deemed it appropriate to partially / fully secure SIB.

Extend/ Pay request:
I/We acknowledge that, in cases of receipt of extend/pay requests, SIB has always the right to (a) extend the validity period of the LG; or (b) pay the amount of the LG, in whole or in part, to the Beneficiary.

Claim/ Demand to Pay

On receipt of a valid demand to pay, SIB is under no obligation to advise me/us upon receipt of demand or in advance or obtain our consent before making any full/partial payment and I/We hereby irrevocably waive any right to challenge to SIB’s making of any payment/settlement.

 Reduction Mechanism
I/We hereby agree that the LG reduction of the guarantee amount is subject to guarantee terms and SIB sole discretion, and that I/We shall provide any document required by SIB in relation to the reduction of Guarantee.

Advance payment

I/We agree that if an Advance Payment LG is to be issued, I/We shall request the beneficiary to credit advance payment amount to our account held with SIB or in case advance

payment amount to be credited in a bank other than SIB, I/We shall provide SIB with evidence of credit of Advance payment proceeds with that Bank. I/We also agree to SIB’s

decision to make Advance Payment LG effective subject to receipt of Advance Payment Guarantee equivalent to guarantee amount, by me/us or by SIB, as it deems appropriate.

Counter Guarantee Conditions

I/We confirm that SIB counter LG(s) will remain valid up to (30) thirty days beyond the expiry of the LG issued by SIB correspondent bank. Notwithstanding the expiry date mentioned in this LG(s) applications (including the expiry date of SIB counter guarantee) should SIB be called upon by SIB correspondent bank, "the guarantee issuing bank" to either allow extension of their guarantee and SIB counter guarantee to a new expiry date or to pay full value owing under the said guarantee (i.e. extend or pay request),

Additional Conditions

As a security of LG(s), I/We hereby pledge in SIB favor all our credit balances, stocks, movables and immovable assets and any other assets or rights whatsoever for an amount

equal to the total of all outstanding LG(s) which SIB/ have issued, or corresponded to issue, at our request. I/We understand that SIB shall always and without further advice debit

my/our account(s) with all payment(s) which SIB may make in connection with SIB LG(s) for any reason, until the LG(s) is treated as cancelled.

I/We agree to pay the commission/fee for issuing the LG(s) and subsequent amendment(s) (if any) in accordance with SIB approved schedule or as pre agreed, together with the

renewal commission, fee, courier, and SWIFT charges or other correspondent bank's charges. All charges and commission/fee will be subject to VAT.

If I/We request issuance of any LG(s) that is subject to automatic renewal or with an open ended validity, I/We understand and agree that such LG will be cancelled where text of

the LG permits upon receipt of the original Bank Guarantee(s) instrument and amendment(s) are returned back to SIB for cancellation or upon SIB receipt of an official letter from

beneficiary to cancel the LG(s) and releasing SIB from SIB obligation thereunder and until then I/We are liable to honor beneficiaries claim received by SIB along with all commissions, fee, charges, expenses due and payable to SIB or to any other intermediary parties in relation with such LG(s).

Cancellation Mechanism

The original guarantee and its subsequent original amendments must be returned to SIB upon their expiry. Nevertheless, I/We understand that SIB is relieved of all its obligations

under any guarantee after the its expiry, even if the original instruments are not returned to me/us

All guarantees issued locally shall be governed by the directives of the Central Bank of the United Arab Emirates and by applicable federal laws of the United Arab Emirates and

any existing local laws and regulations & all guarantees issued by correspondent bank outside UAE shall be subject to the law of issuing bank domicile 

It is understood that SIB has the full right to preclude from any transactions at any point in time where it find necessary to adhere with the applicable laws.

I/We hereby acknowledge that SIB has the discretion to modify, amend or extend any requirement in the LG text, as deemed appropriate.

I/We hereby confirm that I/We have read and understood all the Terms &Conditions above and I/We confirm I/We are aware of our obligations, liabilities and rights related to the LGs requested by me/us.


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