India Adopts Real-Time Digital e-Bank Guarantees

The National e-Governance Division (NeGD) under the Ministry of Electronics and Information Technology (MeitY) and National E-Governance Services Limited (NeSL) have signed Memorandum of About (MoU) in 2025. This partnership aims to integrate and enhance digital document management for government and business sectors. The agreement was formalised at the Global Fintech Fest 2025, marking a key step in India’s digital governance journey.

Background of NeGD and NeSL

NeGD is a division of Digital India Corporation supporting e-governance initiatives across India. It provides technical and advisory help to central and state governments. NeSL is an Information Utility regulated by the Insolvency and Bankruptcy Board of India (IBBI). It acts as a secure repository for financial documents and data submitted by creditors and other entities.

Core Features of the MoU

The MoU integrates NeGD’s cloud-based Entity Locker platform with NeSL’s Digital Document Execution (DDE) system. Entity Locker is an extension of DigiLocker, designed for document issuance, storage, sharing, and verification. NeSL’s DDE enables digital, paperless, and legally valid execution of contracts and bank guarantees. This integration allows users to access digitally executed bank guarantees (e-BGs) directly within Entity Locker.

Benefits of Digital Bank Guarantees

NeSL’s e-BGs offer a tamper-proof and secure alternative to physical bank guarantees. They reduce processing time from days to minutes. All lifecycle events such as issuance, renewal, and invocation are handled digitally. The paperless process supports environmental sustainability. e-BGs are easily verifiable through a central repository, enhancing transparency and legal compliance.

Impact on Digital Governance and Business

This collaboration accelerates digital workflows between government and businesses. It supports India’s vision of ease of doing business by simplifying document management. MSMEs and other users benefit from secure, fast, and affordable access to digital financial instruments. The partnership also strengthens data security, privacy, and compliance with laws like the Insolvency and Bankruptcy Code, 2016.

Future Prospects and Innovations

The MoU lays the foundation for future collaborations between NeGD and NeSL. Plans include expanding services such as e-stamp paper and real-time digital contract signing via e-signing facilities. These innovations aim to create seamless, paperless, and legally valid processes across multiple states and sectors.