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Bank Guarantee

A bank guarantee is when a bank offers surety on behalf of the applicant for different business obligations within certain regulations. The bank takes the payment risk on behalf of its applicant. Bank guarantee is offered on a contractual obligation for the applicant's business and personal transactions. It differs with a letter of credit as in a Bank Guarantee, the Bank becomes a co-signer on the purchase contract, also referred to as the ‘Guarantor’. In the case of BG, the bank assumes to make the payment only when the customer defaults to make a payment, whereas, in Line of Credit, it becomes a primary liability for a bank to pay and later collects the amount from the applicant.

Eligibility

Salaried individuals who are eligible for a car loan

Any person who has a good financial record is eligible to apply.

Documents Required

  • Request Letter and Counter Indemnity cum Memorandum relating to charge over fixed deposit duly stamped (Franking as per respective State Stamp Act).
  • Bank Guarantee text.
  • Board Resolution for Private Limited Company/Limited Company.

Common Questions

● Performance Guarantee ● Bid Bond/Earnest Money Deposit (EMD) Guarantee ● Financial Guarantee ● Advance Payment Guarantee ● Foreign Bank Guarantee ● Deferred Payment Guarantee
Contact us and fill out an application that identifies the amount of and reasons for the Bank Guarantee.
As per RBI, No bank guarantee should normally have a maturity of more than 10years.
Bank guarantees are issued in return for a guarantee fee and against collateral for security.
Advantages of Bank Guarantee: ● Reduction of Financial Risk. ● Increased Opportunities. ● Small Fees. ● No Need for Advance Payments. ● Increased Credibility.

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