Directives for verification of bank guarantees issued

LAHORE:The Punjab Local Government Department has issued instructions to all local government institutions, companies and foreign-funded projects to immediately verify securities.

According to the Punjab Local Government and Community Development Department, strict action will be taken against unverifiable or fake bank guarantees. The Local Government Department has issued instructions regarding bank securities. All relevant institutions have been directed to immediately complete the process of verifying securities.

According to the Local Government Department, all bank guarantees should be accepted only after verification from the bank concerned. Section Officer Project Local Government Mudassar Afzal issued a letter with Subject “Verification and deposit of securities of civil works contracts in designated bank accounts,” in which he said it was reiterated that due care should be taken in dealing with various types of securities relating to civil works contracts in the light of applicable laws, rules and provisions of the contract.

“In the light of the above, the competent authority is pleased to direct that all bid securities, performance securities, quality assurance securities, and retention money relating to all projects, schemes, and contracts shall be deposited in the relevant designated heads/accounts established for the purpose. The release of these securities shall be made strictly in accordance with the specific terms and conditions of the government laws, rules, and the relevant contract agreements,” the letter maintained.

Furthermore, all bank guarantees should be properly verified with the respective issuing banks or financial institutions before acceptance, the letter said adding it should also be ensured that such guarantees remain valid for the period stipulated under the terms of the agreement.