Bank Guarantee

Features :

1. Only financial guarantee should be issued for period not exceeding 10 years.
2. Guarantee should not be allowed to the customers who do not enjoy credit facility bearing small amount guarantees. The small amount guarantee will be on 100% Cash Margin.
3. The guarantee shall be secured on 50% cash margin and 50% movable / immovable security.
4. The guarantee shall have restricted liability clause and guarantee draft letter shall be approved by legal advisor of the bank.
5. The commission shall be levied as approved by the bank from time to time.
6. Branches shall keep a separate Guarantee Issued Register.
7. Once the guarantee period expires, a notice / letter shall be issued to the beneficiary requesting him to return the original guarantee and customer may be persuaded to get back the original guarantee.
8. No guarantee shall be issued without the sanction of Board of the Bank.
9. If any claim arises, it should be referred to H.O. and only after obtaining permission the guarantee claim amount should be settled.
10. The applicant should be asked to clear the claim amount without loss time. If not cleared, the usual steps for recovery of loan should be initiated.
11. While settling the claim, the amount should be debited to separate Guarantee Claims Settled Register and shall carry interest at clean rate till the loan is cleared.