NHAI begins to accept digital bank guarantees
The regulator has stated that the action is anticipated to aid in enhancing the effectiveness and transparency of internal operations and advance the usage of digital technology.
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On November 2, the National Highways Authority of India (NHAI) announced that it has begun collecting electronic bank guarantees (E-BGs) and that all of its current bank guarantees have been converted to digital form.
According to an official statement from the regulator, the NHAI anticipates that its action will advance the adoption of digital technologies and increase the efficiency and transparency of internal procedures.
The authority is using the E-BG services of National e-Government Services Ltd (NeSL), which enables quick access for bank guarantees life cycle events like invocation, renewal, and closure and reduces physical paper movement and storage needs.
According to the company, a few E-BGs have already been issued by banks in the name of NHAI.
In a bank guarantee (BG), a bank serves as a guarantor and agrees to pay the beneficiary a specific sum of money in the event that the debtor from the original contract fails to fulfil their responsibilities under the terms of the contract.
In an effort to control bidders who made excessively low offers, the road transport ministry ordered highway builders to provide more performance security earlier this year.
The National Highways and Infrastructure Development Corporation (NHIDCL), the Border Roads Organization (BRO), and all state governments received the directive from the ministry in May.
