The Guarantee is an independent written undertaking to pay to counterparty (the Beneficiary of the Guarantee), on demand, on behalf of the Principal.
The Bank is bound to make payment to the beneficiary of the guarantee without delay, when it receives a demand that complies with the terms of the guarantee and within its amount and validity.
Guarantees issued by AJIB to local beneficiaries are called Local Letters of Guarantee. These are used primarily for bid bonds, performance bonds, advance payment guarantees, payment guarantees, in addition to guarantees issued in certain formats to different governmental entities.
AJIB can also discuss any guarantee verbiage provided by clients and will consider issuing such guarantees as long as they fulfill the international standards and guidelines, in addition to the internal policies of the bank that are in line with the regulations issued by the Central Bank of Jordan.
Foreign Letters of Guarantee refer to those guarantees when instructions are given by AJIB to another bank outside Jordan, requesting to issue their guarantee on AJIB’s behalf or when other correspondent banks request AJIB to issue a local guarantees on their behalf. Namely it is a Counter-Guarantee, which is an undertaking given by the Counter-Guarantor to another party to procure the issue by that other party of a Guarantee.
Guarantees of this nature are issued to the shipping companies in order to enable clients to take delivery of goods before the arrival of the shipping documents to the bank under Letter of Credit or against Bills for Collection.