Bank guarantee issuance where the liability you issue is the liability you approved
Every clause tied to a model form and a rule, and no instrument issued without an end date.
See one case, screen by screen ↓Bank guarantee issuance is the work a bank's trade operations team does between a client's request and a live undertaking: checking the wording the beneficiary has asked for against the bank's approved model forms and the rules it is subject to, checking the amount and tenor against the credit approval and the collateral, screening the parties, and sending the instrument by SWIFT. Bank Guarantee & Standby LC Issuance adds seven agents that read every clause, name the liability it creates, and leave the specialist, counsel and a checker to decide.
AI use cases in banking: a buyer's guide to agentic AI for bank and credit union operations →
Updated
A guarantee or a standby is not written by the bank. The beneficiary — a port authority, a ministry, a utility, a landlord, an insurance regulator — dictates the text it will accept, the applicant forwards it, and a specialist compares it by eye with a model form kept in a shared folder, under a same-day service promise. The clause that decides how much the bank is on risk for, and for how long, is read in a hurry.
Two clauses do most of the damage. “Valid until all obligations under the contract are fulfilled” has no expiration date and no right to terminate on notice, which ISP98 rule 9.01 requires one of; the instrument then outlives the facility that approved it and sits on the bank's off-balance-sheet report until somebody notices. “The amount shall reduce as the works progress” names no document, so the reduction is not self-operating and never happens — the bank carries the full amount for the whole term and the client pays a fee on liability the works have already retired. Then a demand arrives and the clock starts: five business days under URDG 758 art. 20(a), whatever the documents look like, and a refusal that fails to state every discrepancy is a refusal the beneficiary will win.
Estimated split for one new standby with three non-standard clauses, by hand and with the solution. Our arithmetic over published ranges, not a measured result.
Seven agents read the wording, the facility and every demand; a specialist accepts each clause, counsel signs anything outside the model forms, and a checker releases.
Halvorsen Marine Works has won a USD 25,000,000 contract to build two berths and a ro-ro ramp for the Port of Calder Bay Authority, and the contract needs a performance security of ten per cent. Here is request CNB-SBY-26-00988, screen by screen, in the working solution.
Fourteen guarantees, standbys and amendments are open on the desk, eleven of them still to decide and USD 36,095,000 of liability requested. CNB-SBY-26-00988 is a USD 2,500,000 performance standby under ISP98, and the agents have already read it: three deviations, two wording differences, eleven clauses exact to the model form.
“The agents read each one as it arrives; you decide the wording.” Service level: a wording file within 4 business hours of a complete request.
Priya opens the request and sees the instrument as a bar over time: USD 2,500,000 on risk from October 6, 2026, running straight past the marker where facility TF-2026-10337 matures on March 31, 2029 and off into a hatched section with one chip — Open-ended. Hairlines under the bar tie it to the clauses that shape it: clause 2 the amount, clause 9 the reduction with no trigger, clause 6 no expiry date.
Risk is a shape, not a field: the bar does not end, so neither does the liability.
“This standby shall remain valid until all obligations under the contract are fulfilled.” The redraft gives it a fixed expiry of March 31, 2028, automatic extension for successive twelve-month periods unless the bank gives sixty days' notice, and no extension beyond March 31, 2029 — the facility tenor. It cites model clause 6 of form SB-PERF-03 and ISP98 rule 9.01, at confidence 0.94, and explains why the word “successive” is in the sentence: two courts in 2025 and 2026 read an automatic-extension clause without it as a single extension rather than an evergreen.
“An agent never decides. Accept, edit or reject with a reason — every outcome is recorded against your name.”
Two clicks, each with reason code WD-02. The bar now ends on March 31, 2028 with a hatched automatic extension to March 31, 2029, and clause 9 — “the amount shall reduce as the works progress” — becomes two step-downs: to USD 1,500,000 on the beneficiary's mechanical completion certificate for berth 3, and to USD 750,000 on the taking-over certificate. That is USD 1,750,000 of liability that would otherwise have stayed on the books for the whole term.
The risk agent never prices risk and never blocks a release. It states the liability and names who must decide.
USD 2,500,000 against a USD 40,000,000 trade facility approved on September 14, 2026, leaving USD 15,750,000 after issue; a public-authority beneficiary, permitted; performance security at ten per cent of contract CB-PW-2026-114; pricing of 1.10% per annum that matches the approval grid. Every row names the system it was read from and the time it was read. Before the redraft there was one exception, and it was the tenor.
“An open-ended instrument outlives the facility that approved it.” An exception goes to credit, never to the desk.
The applicant, the beneficiary, the advising bank, the beneficiary's parent authority, the engineer named in the contract and the vessel in its schedule, screened against the consolidated lists of that morning. One possible match on the engineer, cleared on date of birth and address by the sanctions team under reference SCR-26-4471 — the agent never clears its own hit. Beside it, the collateral: a fifteen per cent cash margin of USD 375,000, blocked, with the all-asset security and the counter-indemnity on file.
Clause 12 asked for the law and the courts of the beneficiary's own place. It has no model equivalent, so it routes to trade legal counsel, who signs it under reason code LG-01 with an opinion on file. The release screen then lists every deviation with the wording that will go out, its reason code and the person who decided it. Dale Ferraro releases the MT760 at 10:12 — and the platform will not let him release anything he drafted.
“Reads every decision and releases the message. Cannot draft or change wording, and cannot release anything he made.”
Demand DMD-26-00118 for USD 1,850,000 arrives on another instrument under URDG 758, asking for a twelve-month extension as an alternative to payment. Seven requirements are checked in nine seconds against the rules and the guarantee's own clauses, on day 3 of the five business days art. 20(a) allows. Five are met. Two are not: the supporting statement does not say in what respect the applicant is in breach, and the signer's authority is not evidenced.
The clock runs from the day after presentation, and the queue is ordered by the days left on it.
The notice names both discrepancies and the articles behind them, as URDG 758 art. 24(d) requires, holds the documents at the beneficiary's disposal and says which day of the clock it is sent on. The draft cannot be sent with a discrepancy left out, and the specialist who examined it cannot release it — a checker does. The extend-or-pay alternative is counted separately, with the thirty calendar days art. 23(a) allows and the date the instructing party was told.
“It cannot be sent with a discrepancy left out, and it is released by a checker.”
Across 2,312 live instruments the calendar lists the notices to send, the automatic extensions, the step-downs and the expiries, earliest first, with the liability each one moves. Two non-extension windows close within three weeks; if either notice is late, that instrument extends by twelve months. The agent drafts all of them and sends none — a checker releases each notice.
“Expires Dec 20, 2026 · 60 days' notice · the window closes in 15 days.”
The same standby, seen by the four people who carry it — what their morning looked like, and what it looks like now.
Seven agents read the wording, the facility and every demand; a specialist accepts each clause, counsel signs anything outside the model forms, and a checker releases.
Reads the requested wording clause by clause, matches each clause to the bank's approved ISP98 and URDG 758 model forms, and redrafts every non-standard clause with the model clause and the rule it rests on.
Checks amount, tenor, currency, beneficiary type, purpose and pricing against the credit approval in the loan system, and the collateral held in the collateral management system.
Names the liability each clause or change creates, in money and in dates: exposure with no end, liability beyond the facility tenor, a reduction that is not self-operating, foreign law and forum, transferability.
Screens the applicant, the beneficiary, the advising bank, the beneficiary's parent and the parties, goods, vessels and ports named in the underlying contract — before issue, on every amendment and on every demand.
Examines a demand against the instrument's own terms under ISP98 rule 4 and 5.01 or URDG 758 art. 15, 19 and 20, counts the examination clock from the day after presentation, and drafts the honor advice or the refusal notice.
Watches expiry, automatic extension, non-extension notice and reduction dates across the whole book, and drafts the notices and reduction amendments before each window closes.
Drafts the MT760 issue, the MT767 amendment and the MT765 demand message from the approved wording, and posts and releases the contingent liability on the general ledger at each step-down.
Accepts every clause; counsel signs, a checker releases. The agents propose; a named person decides.
Ask why a bar has no end, what a clause costs, which notices fall due, or tell it to draft the refusal. Every answer points to the clause or the screen it came from.
Why is this standby's bar open-ended?
Clause 6 as the beneficiary wrote it reads “valid until all obligations under the contract are fulfilled” — no expiration date, and no right for us to terminate on notice. ISP98 rule 9.01 requires one or the other, so the bar has no right-hand end and the liability outlives facility TF-2026-10337, which matures March 31, 2029. The redraft gives it a fixed expiry of March 31, 2028, successive twelve-month extensions with sixty days' notice, and nothing beyond March 31, 2029.
What liability does the reduction clause leave on our books?
USD 1,750,000. Clause 9 says only that the amount “shall reduce as the works progress”, which names no document, so the reduction is not self-operating and never happens. With the redraft, USD 1,000,000 comes off on June 30, 2027 on the beneficiary's mechanical completion certificate for berth 3, and a further USD 750,000 on December 31, 2027 on the taking-over certificate.
Which instruments need a non-extension notice in the next 30 days?
Two, and both windows close within three weeks. CNB-SBY-24-00317 for USD 2,400,000 needs its notice by October 21; CNB-SBY-25-00441 for USD 1,150,000 by October 24. If either notice is late the instrument extends by twelve months and USD 3,550,000 stays on the off-balance-sheet report. Two more follow in November; all four are drafted and wait for a checker.
Draft the refusal for demand DMD-26-00118
Already drafted, on day 3 of the five business days URDG 758 art. 20(a) allows. Two discrepancies, each stated as art. 24(d) requires: the supporting statement does not say in what respect the applicant is in breach, and the demand is signed p.p. the Director of Works by a person whose authority is not evidenced. The demand also asks for a twelve-month extension in the alternative; the art. 23(a) suspension runs to November 1 and the instructing party was told on October 5.
13 screens from the working solution, on its sample data. Pick one to see it large.
What the bank guarantee issuance review is checked against, and who has to sign — all settings, versioned and on the audit trail.
| Setting | Default | Choose from |
|---|---|---|
| Model forms library | ISP98: 4 forms · URDG 758: 3 forms · local-law: 3 | Each form versioned, with an effective date and the rules it is written to |
| Open-ended wording | Blocked — nothing is released without a fixed end date | Blocked · Blocked unless counsel signs · Warn only |
| Wording that must go to trade legal counsel | Law, forum, transferability, and any clause with no model equivalent | That set · also assignment of proceeds · every deviation |
| Agent redraft confidence threshold | 0.85 | Step up or down by 0.05, between 0.70 and 0.95 |
| Non-extension notice lead time | 60 days before each expiry | 30 · 45 · 60 · 90 days |
| Specialist releases alone up to | USD 1,000,000 | USD 500,000 · 1,000,000 · 2,500,000 |
| Demand examination target | 3 business days (ISP98) · 5 (URDG 758) | The rules' maximum · the maximum less one day · 3 and 5 days |
| Retention | Five years after expiry; wording files seven years | 5 · 7 · 10 years after expiry |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “typical” = published figures. Rules cited: ICC URDG 758 art. 15, 20(a), 23(a) and 24(d); ICC ISP98 rules 2.06, 4, 5.01(a)(i) and 9.01. The five business days and the three-to-seven business days are the rules' own periods. The 1–4 days added by clause-by-clause validation of non-standard wording and the 3–10 days commonly quoted to issue a guarantee are published practitioner estimates, directional only. Banks, people, ports, authorities, contracts, accounts and BIC codes named on this page are characters and sample data in the working solution.
Bank guarantee issuance is the work a bank's trade operations team does between a client's request and a live undertaking: checking the wording the beneficiary has asked for against the bank's approved model forms and the rules it is subject to, checking the amount and tenor against the credit approval and the collateral, screening the parties, and sending the instrument by SWIFT. Bank Guarantee & Standby LC Issuance adds seven agents that read every clause, name the liability it creates, and leave the specialist, counsel and a checker to decide.
The request arrives with the beneficiary's own wording. Four agents read it in under a minute: the wording agent matches all sixteen clauses to the model form and redrafts the ones that deviate, the facility agent checks the amount and tenor against the credit approval, the sanctions agent screens the parties and the underlying contract, and the risk agent puts a number on the liability each clause creates. The specialist accepts, edits or rejects each one with a reason code, counsel signs anything outside the model forms, and a checker releases the message.
A demand guarantee is usually written to URDG 758 and a standby letter of credit to ISP98, and the two rule sets differ on what a demand must say, how long the bank has to examine it and how the instrument ends. The solution holds both sets of model forms, tags each instrument with the rules it is subject to, and examines every demand under the articles that govern that instrument — art. 15, 19 and 20 for a URDG guarantee, rule 4 and 5.01 for a standby.
Under URDG 758 art. 20(a) the guarantor has five business days following the day of presentation to examine a demand and decide, and that period is not shortened by the number or complexity of the documents or by how close the presentation is to expiry. Under ISP98 rule 5.01(a)(i) notice of dishonor within three business days is deemed not unreasonable and beyond seven business days is deemed unreasonable. The demand queue is ordered by the days left, and the clock is counted from the day after presentation.
ISP98 rule 9.01 requires a standby to contain an expiration date or to permit the issuer to terminate it on reasonable prior notice. Wording with neither is blocked by default: nothing is released without a fixed end date, and the setting can instead require counsel's signature or only warn. On screen the instrument with no end date is not a flag — the liability bar simply runs off the edge.
An automatic extension clause is drawn as a hatched section on the bar, with the date beyond which the instrument may not extend. The expiry agent watches every expiry, extension and notice date across the whole book, lists them earliest first with the liability each one moves, and drafts the non-extension notices before their windows close. It drafts and never sends; a checker releases each notice.
Yes. The agents propose and cite; they never issue, amend, pay, refuse or release. Every clause decision carries a reason code and a named person, any clause with no model equivalent is signed by trade legal counsel with an opinion on file, and the person who submits an instrument can never be the person who releases it. Internal audit reads everything and decides nothing.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your model forms, your credit policy and a sample of past instruments and demands — and it goes live once every quality gate has passed. We will walk you through it on your own wording first.
Every trade alert decided in days, with the evidence that decided it.
1-min demoTrade Sanctions & Dual-Use ScreeningEvery party, bank, vessel, port and goods line screened, cited and decided the same day.
1-min demoTrade Finance Fraud DetectionEvery cargo fingerprinted and checked against the bank's own financing before funding.
1-min demoWe'll run Bank Guarantee & Standby LC Issuance on a sample of your own guarantee and standby wording, against your own model forms.