Document background
The Unsecured Bank Guarantee is a crucial financial instrument in Nigerian business transactions, particularly utilized when a party needs to provide financial security without tying up physical assets as collateral. This document is commonly used in tender submissions, performance securities, advance payment guarantees, and various commercial transactions. The guarantee, regulated by Nigerian banking laws and the Central Bank of Nigeria, creates a primary obligation on the bank to pay upon demand, independent of the underlying transaction between the principal debtor and the beneficiary. It differs from secured guarantees as it relies solely on the bank's creditworthiness and the principal debtor's financial standing, rather than specific collateral. The document must comply with Nigerian banking regulations, particularly the BOFIA 2020 and CBN guidelines, and includes specific provisions for demand procedures, payment terms, and enforcement mechanisms.
