What does bank guaranty mean?

bank guaranty meaning in Law Dictionary

whenever a bank problems a letter to some other party for its customer. It safeguards possessions within the 3rd functions custody.

bank guaranty meaning in Business Dictionary

Letter of indemnity granted by a bank to a 3rd party, on the behalf of a customer and against the buyer's counter-guaranty as a security. A bank, as an example, may issue a guaranty to a shipping organization protecting it from any harm or loss arising out of the release of a shipment where its consignee (bank's customer) features lost or misplaced original shipping documents. In construction business, a bank guaranty (as a bid bond or performance bond) is a vital requirement of the prize of a contract.