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  Home » Services » Bank Guarantees

Bank Guarantees


Bank Guarantee is a non fund based credit facility  extended by the Bank.
Our Bank furnish Guarantees on  behalf of our customers in lieu of their obligations,performance or their  requirements.       

Section 126 of Indian contract  Act, 1872, defines Guarantees as a contract to perform the promise or discharge  the liability of a third person in case of his default.      

Types of Guarantees                 

  • Financial Guarantees Where under the contracts entered into by the customer of the bank, cash deposit or earnest money is required to be       deposited for due performance of the contract, it may be stipulated that  the customer may, in lieu of cash deposit or earnest  money, furnish bank guarantee for the  amount.               

  • Performance Guarantees The Guarantees meant for       performance of contracts entered into by the customer are called       performance guarantees.The banker in such cases does not only agree and       undertake that his customer on his part shall duly and effectively observe       and perform the conditions of the contract entered into by him,but also declares       that in the event of default by the customer ,he will upon being informed       of such default and such information being conclusive,make payment for       such default as agreed in the Guarantee.           

  • Deferred payment Guarantees This is a Guarantee for a payment       of purchase of capital goods like machinery,the necessity to issue       Deferred payment Guarantee           

Guarantees will be issued against 15% cash margin  and Collateral security of property worth not less than 150% for unsecured  portion.           

Bank Guarantees cane  be extended at the request of the applicant only for a further period of not  exceeding three years.





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