Understanding Amendment in Guarantees

An Amendment refers to a formal contractual change to an already issued guarantee.

What can be amended?

• Guarantee Amount (increase/decrease)
• Expiry Date
• Terms & Conditions

Key Behavior in RIVO:

• Creates a new amendment record
• Follows maker-checker approval flow
• Requires beneficiary consent (if terms are impacted)
• Involves external communication (bank/beneficiary)

Impact on Amount:

• Total Guarantee Amount → Reduced
• Available Balance → Reduced

Illustration:

• Original Guarantee: USD 1,000,000
• After Amendment: USD 800,000

👉 Result:

• Contract value changes legally
• Beneficiary must accept the new amount

Status updates to “Amended”

Understanding Reduction in Guarantees

A Reduction is a planned or operational decrease in the guarantee’s available balance.

When is Reduction used?

• Partial utilization of guarantee
• Milestone-based release
• Pre-agreed reduction schedule

Key Behavior in RIVO:

• No new contract created
• Minimal workflow (may include internal approval)
• No beneficiary consent required
• No external communication needed

Impact on Amount:

• Total Guarantee Amount → Remains unchanged
• Available Balance → Reduced only

Illustration:

• Original Guarantee: USD 1,000,000
• Reduced by: USD 200,000

👉 Result:

• Deal Amount = USD 1,000,000 (unchanged)
• Balance = USD 800,000
• Status remains Active/Issued or marked as Reduced

Key Differences at a Glance