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Bank Guarantees Standby Letters of Credit
ATFBank JSC
Prepared for FSC RES LLP
as part of the Rules for Arranging and
Holding Auctions No.16240 dated
January 17, 2018
1
STANDARD & POOR’S rating
-Long-term credit rating at ‘B’
-Short-term credit rating at ‘B’
MOODY’S INVESTORS SERVICE rating
Long-term tenge and foreign currency deposit
rating at ‘B3’
FITCH RATINGS rating
Local and foreign currency issuer default
rating at ‘B’
Thanks to the stable development,
ATFBank JSC is solidly ranked
amongst the top 10 biggest banks
in Kazakhstan.
Thus, according to NBK data, as
of January 1, 2018, ATFBank is:
- the 8th by assets,
- the 7th by loan portfolio
- the 8th by deposit portfolio.
70 outlets located in 32 cities
Extensive ATM network
2
Financial security for the auction bid proposals
The rules for arranging and holding auctions allow using the following types of financial security for the auction
bid proposal:
BANK GUARANTEE
STANDBY LETTER OF CREDIT
Financial security can be provided by ATFBank JSC:
AGAINST PLEDGE OF MONEY (COVERED GUARANTEE)
AS PART OF THE OPENED CREDIT FACILITY
Advantages of filing the application to ATFBank JSC:
-Minimum package of documents
-Shortest time for consideration
-Lowest handling fees
3
BANK GUARANTEE Bank guarantee is a firm obligation of a bank to pay the beneficiary a fixed amount in the
event of the principal failing to fulfill its contractual obligations.
The guarantee is not a method / way of payment under the contract, but acts as the form
of securing obligations (financial or non-financial), and is paid only if the principal fails to
fulfill the contractual obligations upon submission of the payment claim to the guarantor
bank by the beneficiary.
Internationally, bank guarantees are regulated by the Uniform Rules for Demand
Guarantees, ICC 758, edition 2010 (URDG 758).
COVERED GUARANTEE is a guarantee to secure which the Customer mortgages funds on
its current account with the Bank in the amount and currency of the guarantee that are then
debited from the Customer’s current account and are recorded in the money storage
account until the guarantee expires.
UNCOVERED GUARANTEE is a guarantee secured by a credit facility or other collateral,
other than a mortgage of money.
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Types of bank guarantees
By the principle of a mechanism of opening and use:
Direct guarantee
Applicant Beneficiary
Guarantor
bank
1. Contract
2. A
pp
lica
tio
n
3. Guarantee /
SWIFT
Advising bank
Indirect “confirmed”
guarantee
Applicant Beneficiary
Guarantor
bank
1. Contract
2. A
pp
lica
tio
n
3. Counter-guarantee
/ SWIFT
4. G
ua
ran
tee
Counter-
guarantor bank
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Standby letter of credit
Standby letter of credit is a form of a letter of credit, in which payment by the bank is
made in the event that the principal fails to fulfill its contractual obligations.
Thus, the standby letter of credit fulfills the security function, just like the bank
guarantee. Accordingly, a mandatory document for receiving payment under a standby
letter of credit is the claim of the beneficiary addressed to the issuing bank, in which the
beneficiary notifies the bank of the applicant’s failure to fulfill its contractual obligations.
Essentially, a standby letter of credit is a bank guarantee issued in the format of a
documentary letter of credit.
• A standby letter of credit can be paid only against the claim of the beneficiary, which can
be accompanied by commercial documents confirming the fact of fulfillment / nonfulfillment
of obligations.
• Standby letters of credit may be subject to the International Standby Practices, ICC 590,
edition 1998 (ISP98), or the Uniform Customs and Practice for Documentary Credits (UCP
600), or the legislation of the issuing bank country, depending on the agreement of the
parties and the participating banks.
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Opening and execution of a standby letter of credit
Seller 1. Contract
2. A
pp
lica
tio
n
3. Opening of letter of credit
4. A
dvis
ing
5. Goods dispatch
6. No payment for goods upon lapse of deferral
7. P
aym
en
t cla
im +
do
cu
ments
8. Payment claim + documents
11
. R
eim
bu
rsem
ent
10
. P
aym
en
t
9. Payment 1
2. D
ocu
me
nts
Issuing bank Advising bank
Buyer
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ATFBANK JSC TARIFFS FOR AUCTION PARTICIPATORS
Terms of the issued international bank guarantees as well as local bank guarantees issued through
SWIFT/Telex interbank information transfer channels
№ Fee name Fee size Charging procedure
SME Corporate
2.1. Issuing international bank guarantee or local bank guarantee through SWIFT/Telex
- technical execution of the issued
bank guarantee (operational
issue)
0.25%
Min. KZT 23,000
Max. KZT 230,000
One-off fee payable on the
transaction day, calculated
based on the guarantee
amount
- issue of bank guarantee as part
of the existing bank guarantee
+ 5.0% p.a.
Min. KZT
10,000
8.0% p.a.
Min. KZT
10,000
Payable as set forth in the
decision of the Authorized
Body of the Bank,
calculated based on the
guarantee amount for the
entire validity of the
guarantee
2.2.
Changing the terms of the bank
guarantee at the customer’s
application (operational issue of
changes on guarantees), except
for changes relating to the
increase in the guarantee amount
KZT 7,700
One-off fee payable on the
transaction day, for each
application for change
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For fee charging purposes, increase in the amount of the issued bank guarantee is considered as
a standalone issue of a bank guarantee for the amount of increase
2.3.
Checking the claim and/or
documents provided by the
beneficiary as part of fulfilling
the obligations under the issued
guarantee
0.20%
min. KZT 15,500
max. KZT 155,000
One-off fee payable on the
transaction day, for each
claim and/or package of
documents, calculated
based on the amount of
claim and/or documents
2.4. Payment of the beneficiary’s claim under the issued guarantee:
- intrabank payments in favor of
the Bank’s customers free
- in Kazakh tenge KZT 500 One-off fee payable on the
transaction day
- in foreign currency
0.20%
Min. KZT 5,000
Max. KZT 50,000
One-off fee payable on the
transaction day, calculated
based on the payment
amount
2.5.
Requesting the beneficiary, at the
customer’s application, for the
consent to abolish the issued
guarantee before the validity, as
part of guarantee operations*
KZT 15,500 One-off fee payable on the
request day
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Services on the bank guarantees issued by the third parties in favor of the Bank’s customers,
received by the Bank through SWIFT/Telex interbank information transfer channels as part of
representation of interests of the customers on issues related to bank activity
№ Fee name Fee size Charging procedure
SME Corporate
3.1. Advising a guarantee KZT 15,500 One-off fee payable on the
transaction day
3.2. Advising changes on guarantees KZT 6,500
One-off fee payable on the
transaction day, for each
message
3.3.
Lodging a claim for payment
under the guarantee based on the
customer’s instructions
KZT 9,200
One-off fee payable prior
to rendering a service, for
each claim lodged
3.4.
Transferring a request for the
consent to abolish the issued
guarantee before the expiry of
validity to the customer, at the
application of the principal /
issuing bank*
KZT 15,500
One-off fee payable on the
date of transferring a
request, for each request
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CONTACT INFORMATION
Nurzhan Beketayev, Chief Specialist Central Region Corporate and Private Banking Department ATFBank JSC, 6/4 Kabanbay batyr ave. 010000 Astana, Kazakhstan Tel.: +7 7172 591866 ext. 5265 Mob.: +7 707 721 26 59 mailto: [email protected] http://www.atfbank.kz
Andrey Khlestkin, Chief Specialist Central Region Corporate and Private Banking Department ATFBank JSC, 6/4 Kabanbay batyr ave. 010000 Astana, Kazakhstan Tel.: +7 7172 591866 ext. 5257 Mob.: +7 701 273 88 43 mailto: [email protected] http://www.atfbank.kz
