To further improve the efficiency and transparency of internal processes and take forward the adoption of digital technology, NHAI has started accepting Electronic Bank Guarantees (E-BGs) and has also digitalized all its existing Bank Guarantees. NHAI is utilizing the E-BG services of National e-Governance Services Limited (NeSL), which facilitates reduction in physical paper movement, elimination of physical storage needs and easy access for Bank Guarantee life cycle events like invocation, renewal and closure. Few E-BGs have already been issued by the Banks in favour of NHAI.
Smt. Alka Upadhyaya, Secretary, Ministry of Road Transport and Highways & Chairperson, NHAI said, “Keeping in view the advantages of E-BGs, we encourage the concessionaires to adopt E-BGs. This is in line with the spirit of ‘Digital India’. E-BGs promote transparency, bring in several efficiencies and provide ease of doing business to our stakeholders.”
Bank Guarantee (BG) is a commercial instrument used as a legal contract in which a bank acts as a guarantor and undertakes an obligation to pay the beneficiary a certain amount of money specified in the guarantee if the debtor from the original contract does not fulfil his contractual obligations. Organizations like NHAI require BG, generally for the faithful fulfilment of contractual obligations. The physical form of the BG presents challenges like a time-consuming verification process and the possibility of fraud. However, NHAI has been dealing with BG-related issues and challenges effectively and efficiently through its internal processing mechanism.
Disclaimer: This is an official press release by PIB.