Afghanistan's construction sector is booming. Government departments and NGOs are floating the tenders for development works like constructions of roads, buildings, bridges etc. The contractors require Bid bond guarantees, performance guarantees, advance payment guarantees etc. while undertaking the contracts. Similarly contracts are executed by traders to supply the goods to various organisations, NGOs. Kabul Bank is assisting the contractors by providing Letter of Guarantee facilities to them. The important features are as under:

• Letter of Guarantees are backed by Cash Margin. Cash margin is decided based on the financial standings, experience, performances and dealings with the bank.
• Guarantees are issued for less margin in case backed by collateral security.
• The applicant has to submit the relevant papers like sanction of contract, supply agreement, license and category or class of contractor.
• Charges and commission for issuance of Letter of Guarantee are collected upfront.
• Letter of Guarantees are usually issued for a maximum period of one year.
• Bank is not liable for any claim after expiry of guarantee but the margin money will be returned after receiving the original Letter of Guarantee Bond duly released by beneficiary.