To eliminate the possibility of bank guarantee fraud, Chandigarh municipal corporation (MC) has put in place a special platform for accepting electronic performance bank guarantee (EPBG) from vendors or contractors. It received its first EPBG on Friday.
The move comes in the wake of an alleged multi-crore scam by a firm that had been given the city’s parking contract. The firm had allegedly provided forged bank guarantees to the Chandigarh MC for getting the contract.
MC commissioner Anindita Mitra said the corporation had issued office order to receive preference bank guarantees from vendors/contractors only in EPBG format from July 1 this year. The civic body shall receive SWIFT bank guarantee confirmation on its platform to recognise or accept the bank guarantee.
She said now vendors or contractors need to submit their bank guarantee which needs to be created on the SFMS (structural financial messaging system) platform of the issuer banker. Therefore, Chandigarh MC is in position to eliminate manual intervention for verifying the bank guarantee from the issuer banker. This SFMS platform is also regulated by the Reserve Bank of India, Mitra said.
The commissioner further said that it is a secure messaging standard developed to serve as a platform for intra-bank and inter-bank applications. SFMS can be used for secure communication within the bank and between banks for enhanced security and reduces the possibility of fraud.
{{/usCountry}}The commissioner further said that it is a secure messaging standard developed to serve as a platform for intra-bank and inter-bank applications. SFMS can be used for secure communication within the bank and between banks for enhanced security and reduces the possibility of fraud.
{{/usCountry}}She confirmed the corporation received its first EPBG on Friday though its platform from the issuer bank of SBI located in the state of Gujarat.