These are binding commitments given by NIC Bank to support the customer’s trading activities and are payable on simple demand.
Below are the Bonds we offer:
Bid bonds – A Bid Bond is a guarantee issued by the NIC Bank on behalf of our customer to aid in the bidding for a contract/supplies. It assures the owner of the tender that the supplier will be delivered as per the terms stipulated in the contract. NIC Bank offers unsecured Bid Bonds up to a limit of KES 10M.
Performance bonds – These are usually given to a contractor once they win the tender and are awarded the job. It gives assurance to the tender owner that the job given will be performed satisfactorily and as per the stipulated contract. NIC Bank offers 50% cash covered Performance Bonds up to a limit of Kshs. 3M.
Other Guarantees include:
Advance Payments Guarantees – An Advance Payment Bond/Guarantee (APG) is issued instead of or, in conjunction with a Performance Bond. This type of bond is required only when the Principal asks for a sum of money to be paid in advance of the works/services being carried out. The beneficiary is therefore guaranteed that these funds will be repaid in the event of non-delivery of goods or default on the contract.
Retention Guarantees – A Retention Bond is issued instead of or, in conjunction with a Performance Bond or Advance Payment Guarantee. The beneficiary may withhold a certain amount of money to ensure the works or services have been completed satisfactorily. The issuance of a Retention Bond allows early release of the funds by the beneficiary to the Principal. The beneficiary has the comfort that any funds that are released to the principal can be claimed back if the Principal has defaulted under the terms of contract.
Bank Guarantees – Bank Guarantees are issued by NIC Bank on behalf of our customers to guarantee no payment risk under a contract between the customer and a third party, in the event our customer fails to pay.
Custom and Immigration Bonds – A Customs Duty Deferment Bond/Guarantee is issued to enable an importer to bring goods into the country before paying the import duty to the Customs Authority. The Guarantor (NIC Bank) guarantees to pay the Customs immediately on demand for each and every sum for which deferment is allowed during the continuance of the guarantee.