Banky team Reviewed editorial answerIt is a written undertaking from the bank, at the request of the company (the client), to pay a certain amount to another party (the beneficiary, such as a government entity) if the company fails to perform the contract.
Its types are: preliminary (to enter a tender), final (to guarantee performance), and advance payment. The bank charges an issuance commission and blocks a percentage of the company's account as a cash cover.