Letter of Guarantee

Meeting your trading obligations

Meeting your trading obligations

Letter of Guarantee

Meeting your trading obligations

The danger of failure or unwillingness of one or more partners to fulfill their obligations on a local or international level is a risk that no company should take. Let us ensure that your company is protected from financial losses with a Letter of Guarantee.

  • Reduce financial risks
  • Globally accepted
  • Guaranteed payment


Bid Bond:

During a bid-based selection process, a Bid Bond assures the project owner that that bidder will accept the contract if selected and will carry out their obligations. in the event of the bidder refusing to accept the contract, the bank issuing the bid bond will pay the agreed amount to the project owner.

Performance Bond:

A performance guarantee safeguards the beneficiary from a monetary loss if the party to whom a contract is awarded fails to deliver on the contractual obligations. The bank issuing the performance will pay the beneficiary the agreed sum if the project not completed.

Financial Guarantee:

A payment guarantee protects the beneficiary when payments due are not made for good delivered or service provided. They are also used to mitigate risk when businesses deal with foreign markets.

Customs Guarantee:

A custom surely bond is issued in favor of the department of customs as a security against non-payment of the importers’ custom dues.

Advance Payment Bond:

Project owners will sometimes make payments to a contractor before commencement of a project to make certain preparations. An advance payment bond is a Guarantee that allows the project owner to recover advance payment extended to the contractor in the event of a default in meeting contractual obligations.

Advising LG:

Based on a foreign bank’s request, Al Rajhi can advise a beneficiary in Saudi Arabia that a guarantee is Available. Al Rajhi responsibility is limited to verifying the authenticity of the instruments and advising the beneficiary without delay.

Retention Guarantee:

A retention bond safeguards the interests of the customer against deficiencies after a project is completed and prior to final acceptance. It guarantees that the contractor will rectify the defects.

Zakat Guarantee:

A Zakat & income tax bond is issued in favor of the department of Zakat & income tax as security against non-payment of outstanding income tax, penalty for delays.

Standby Letters of Credit:

Standby letters of credit are often used in trade transactions as a secondary payment mechanism. It is issued by the bank on behalf of its customers to assure the beneficiary of the customer's ability to deliver under the terms of the contract. The beneficiary can cash a standby letter of credit if the customer fails to fulfill a contractual obligation. It can be canceled as soon as the terms of the contract have been met by the customer

Benefit and Features


Secure customers entering into bids, sales contracts, and tenders.



Ability to track outstanding payments and orders easily.


Fulfillment of contracts with counterparties, based on the guarantee terms.

You Can Apply Through These Channels

Apply Now

through alrajhi bank eTrade


Through Branches

Business Solutions Branches

Fill & submit LG application

Frequently Asked Questions:

We can process your letter of Guarantee within 24 hours upon receipt of a complete application, subject to the availability of your credit facility.
Yes, we can issue letters of guarantees in special text but it is subject to shariah, legal and risk approvals.
Please return the original Shipping Guarantee to Al Rajhi Bank for cancellation.