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  • Product Disclosure Sheet HSBC Bank Malaysia Berhad: Public

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    HSBC Bank Malaysia provides bank guarantee services to support business needs such as tender bids, contract performance, advance payments, and retention bonds. The key types of guarantees include tender bid bonds, performance bonds, advance payment guarantees, and retention bonds. Customers must pay issuance fees and commissions and may be responsible for the full guarantee amount if the beneficiary makes a claim. HSBC also offers other trade financing solutions and customers can contact their relationship manager for more details.

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    HSBC Bank Malaysia provides bank guarantee services to support business needs such as tender bids, contract performance, advance payments, and retention bonds. The key types of guarantees include tender bid bonds, performance bonds, advance payment guarantees, and retention bonds. Customers must pay issuance fees and commissions and may be responsible for the full guarantee amount if the beneficiary makes a claim. HSBC also offers other trade financing solutions and customers can contact their relationship manager for more details.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Download as pdf or txt
    287 views3 pages

    Product Disclosure Sheet HSBC Bank Malaysia Berhad: Public

    Uploaded by

    syanakim
    HSBC Bank Malaysia provides bank guarantee services to support business needs such as tender bids, contract performance, advance payments, and retention bonds. The key types of guarantees include tender bid bonds, performance bonds, advance payment guarantees, and retention bonds. Customers must pay issuance fees and commissions and may be responsible for the full guarantee amount if the beneficiary makes a claim. HSBC also offers other trade financing solutions and customers can contact their relationship manager for more details.

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    © All Rights Reserved
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    of 3

    PRODUCT DISCLOSURE SHEET HSBC Bank Malaysia Berhad

    (Read this Product Disclosure Sheet before your


    business/company decides to take up the Bank Guarantee
    services. Be sure to also read the terms and conditions as
    stipulated in the Facility Offer Letter.) BANK GUARANTEE
    - Tender Bid Bond
    - Performance Bond
    <26/07/2019> - Advance Payment Guarantee
    - Retention Bond
    - Financial Guarantee
    - Other Guarantees

    1. What is this product about?


    Bank Guarantee is a guarantee letter issued by HSBC Bank Malaysia Berhad (the Bank) on behalf of our customer to a
    third party as a guarantor undertaking to pay an agreed sum if the customer fails or defaults in fulfilling their
    contractual obligations under the terms and conditions of the guarantee.

    For urgent Bank Guarantees, GuaranteeSmart is available subject to facility being fully secured by 100% cash deposit.

    Tender Bid Bond

    This guarantee is applied for by our customer (bidder) to support their tenders for contracts from potential buyers. The
    buyer is afforded a financial remedy if the tender is withdrawn by the bidder or the successful bidder fails to enter into
    a contract, or does not provide subsequent bond, such as a Performance Guarantee, to support the contract. The purpose
    is to substantiate the financial standing of the bidder.

    Performance Bond

    This guarantee replaces the Tender Bid Bond if the tender is accepted. Performance Bond is an undertaking on behalf
    of our customer (principal), to pay cash if the obligations of the principal under the contract are not discharged. The
    amount of such bonds is usually based on a percentage of the value of the contract and is significantly greater than that
    of the related Tender Bid Bond.

    Advance Payment Guarantee

    This guarantee is an undertaking to pay, on behalf of our customer (principal), the sum paid in advance under the
    contract by the contracting party (beneficiary) for obligations that have not yet been performed. Contracts sometimes
    include provisions, which allow principals to receive advance payments from beneficiaries for purposes such as
    mobilising plant and equipment or purchase of raw materials. The terms of such contracts normally provide that such
    sums advanced must be paid from (set-off against) progress payments under the contract. The beneficiary can recover
    the amount paid or a part thereof under the Advance Payment Guarantee if the principal fails to fulfil their underlying
    contractual obligations.

    Retention Bond
    Contracts may allow the contracting party (beneficiary) to retain a proportion of the contract sum until substantial
    completion of the contract has taken place, such as remedial works during warranty period. The beneficiary may be
    prepared to release this retention money to the principal against the presentation of this guarantee.

    Financial Guarantee
    A common type of guarantee issued to provide our customers with the means of obtaining facilities (which, for BG-i,
    should not be interest-bearing facilities or contain elements contrary to Shariah), from the beneficiaries of the
    guarantees, who may, if the need arises, claim under such guarantees up to a maximum amount and within a set period
    of time. For example; rent payments under a lease agreement, payment for utilities, court fees, etc.

    Other Guarantees
    This includes types of guarantees other than the ones mentioned above. Examples are Service Deposits, Supply
    Contracts, Security Deposits etc.

    2. What do I get from this product?

    PUBLIC
     Allows your company/business to expand into new markets.
     Provides security to your counterparty by a reputable bank.
     Facilitate open account trade business for your company

    3. What are my obligations?


    Your business/company will need to pay us the full guarantee amount should there be a claim from the beneficiary, in
    accordance to the terms and conditions of the Facility Offer Letter.

    4. What are the fees and charges I have to pay?


    Key charges include:-
    Key Charges Description
    Bank Guarantee (BG) Issuance 0.1% per month or part thereof of the guarantee amount (min RM100 SME
    Commission customers)
    Amendments to Bank RM100 for every Bank Guarantee amendment
    Guarantee
    GuaranteeSmart Commission 0.125% per month (1.50% p.a.) of guarantee value (min RM350) per guarantee
    issued whichever is higher
    Other charges Please refer to our schedule of tariff and charges at www.hsbc.com.my

    Issuance commission is calculated based on the exact number of months the guarantee is valid for (From Value Date
    until Liability Date). Issuance commission for a guarantee amount of MYR10,000 for 7 months would be computed as
    follows: -

    MYR10,000 x 1.2% p.a. x 7 months/12 months = MYR70

    5. What if I fail to fulfil my obligations?

    If the guarantee amount has to be recovered by any process of law, all fees and expenses in connection with such
    recovery, including the Bank’s solicitor, fees and cost, shall be borne by the customer.

    6. Do I need any takaful coverage?

    Whilst you do not specifically need to take up any takaful coverage for this product, you are encouraged to consider
    taking up appropriate coverage to protect your goods / business such as Marine Cargo Insurance, Fire
    Commercial or Flexi Business Shield. Please contact your Relationship Manager for further details.

    7. Do I need a guarantor or collateral?


    On a case to case basis depending on your payment capabilities and other credit considerations.

    8. What are the major risks?


    Customer may be subject to the risk of fraudulent claims or frivolous claims by the beneficiary as clauses in the bank
    guarantee may enable a claim from the beneficiary to be undisputed.

    9. What do I need to do if there are changes to my contact details?


    It is important that the Bank is informed of any change in your business/company’s contact details to ensure that all
    correspondences reach your business/company in a timely manner. Changes in your business/company’s contact
    details should be formally submitted in writing and duly authorized by the company’s authorized signatories. Please
    contact your Relationship Manager for further clarification.

    10. Where can I get further information?


    Please obtain further information from our website at www.hsbc.com.my or alternatively call your respective
    Relationship Manager or Trade representative.

    11. Where can I get assistance and redress?


     If you have difficulties in making payments, you should contact your Relationship Manager earliest possible to
    discuss payment alternatives.

     If you wish to speak to our Trade representative, you may contact us at:

    PUBLIC
    Client Service Team
    Tel: 1-300-88-1099
    Email: [email protected]

     If you wish to complain on the products or services provided by us, you may contact us at:
    Customer Experience Team
    HSBC Bank Malaysia Berhad
    2 Leboh Ampang
    50100 Kuala Lumpur
    Malaysia
    Fax: +603-2179 1111 (9.00AM to 4.00PM – Monday to Friday)
    E-mail: [email protected]

     If your query or complain is not satisfactorily resolved by us, you may contact Bank Negara Malaysia LINK or
    TELELINK at:
    Bank Negara Malaysia
    P.O. Box 10922
    50929 Kuala Lumpur.
    Tel: 1-300-88-5465 (1-300-88-LINK)
    (Overseas: 603-2174-1717)
    Fax: 603-2174 1515
    E-mail : [email protected]
    SMS: 15888
    Operating Hours: 9.00AM to 5.00PM – Monday to Friday

    12. Other trade financings available?


    Other trade finance solutions available are

     Receivables Financing
     Supply Chain Financing
     Pre / Post-Shipment Buyer Loans
     Pre/Post-Shipment Seller Loans
     Documentary Credit Issuance / Shipping Guarantee
     Standby Documentary Credit Issuance
     Export Bills Purchased
     Export Documentary Credit Negotiation
     Export Credit Refinancing

    Please also contact your Relationship Manager or Trade Representative for details of other Non-Financed Trade
    Services.

    The information provided in this disclosure sheet is valid as at 26/07/2019.

    PUBLIC

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