Bank Guarantee
Secure financial guarantee for your business transactions
About Bank Guarantee
Financial assurance for business commitments
A Bank Guarantee is a commitment by Fingrowth Bank to pay a specified sum to the beneficiary if the applicant (our customer) fails to fulfill their contractual obligations. It serves as a financial security instrument for business transactions.
Bank Guarantees are essential for businesses engaged in contracts, tenders, imports, exports, and various commercial transactions. They provide credibility and financial assurance to your business partners.
Types of Bank Guarantees
Performance Guarantee
Assures that the contract terms will be fulfilled as per agreement. Commonly required in:
- Construction contracts
- Supply contracts
- Service agreements
- Government tenders
Bid Bond Guarantee
Required when participating in tenders. Ensures:
- Bidder's seriousness
- Acceptance of tender if selected
- Entry into formal contract
- Protection to tender inviter
Financial Guarantee
Guarantees payment obligations such as:
- Loan repayment guarantees
- Advance payment security
- Deferred payment guarantees
- Credit enhancement
Advance Payment Guarantee
Protects advance payment made by buyer:
- Refund if goods not supplied
- Protection against default
- Mobilization advance security
- Down payment protection
Retention Money Guarantee
Replaces retention money in contracts:
- Post-completion warranty
- Defect liability period
- Quality assurance
- Maintenance period security
Customs/Excise Guarantee
For import/export and excise matters:
- Customs duty payment
- Import license compliance
- Excise duty obligations
- Tax department requirements
Eligibility Criteria
Business Entities
Companies, firms, partnerships, LLPs, and sole proprietorships with established business operations
Individuals
Professionals, contractors, and businessmen with proven track record and financial stability
Contractors & Suppliers
Engaged in government or private sector contracts, tenders, and supply agreements
Key Requirements
- Existing account holder or willing to open an account
- Satisfactory credit history and financial standing
- Adequate collateral/security as per bank norms
- Valid business documentation and licenses
- Genuine business need for the guarantee
Security & Margin Requirements
Collateral Security
Bank Guarantee facilities typically require adequate security to mitigate risk. The type and extent of security depends on the guarantee amount and customer relationship.
Cash Margin
Fixed deposit or cash deposit:
- 25% to 100% of guarantee amount
- Based on customer relationship
- Blocked until guarantee closure
Immovable Property
Mortgage of property:
- Residential or commercial property
- Clear title documents required
- 50% margin on market value
Government Securities
Pledge of securities:
- NSC, KVP, LIC policies
- Government bonds
- Shares and debentures
Personal Guarantee
Third party guarantee:
- From creditworthy individuals
- With adequate net worth
- Joint and several liability
Documents Required
For Individuals:
- Duly filled application form for Bank Guarantee
- KYC documents (PAN Card, Aadhaar Card, Address Proof)
- Income Tax Returns of last 2-3 years
- Bank statements (last 6 months)
- Contract/Agreement copy requiring guarantee
- Passport size photographs
For Business Entities:
- Company/Firm registration documents
- MOA & AOA / Partnership Deed / LLP Agreement
- Board Resolution (for companies)
- GST registration certificate
- Financial statements (last 2-3 years)
- Income Tax Returns
- Business bank statements
- KYC of directors/partners
Additional Documents:
- Original contract/tender document
- Copy of work order/purchase order
- Format of Bank Guarantee (if prescribed)
- Security documents (property papers, FD receipts, etc.)
- Other documents as required by the bank
Charges & Fees
Commission Charges
Quarterly/Annual commission on guarantee amount as per bank's prevailing rates. Rates vary based on guarantee type and risk assessment.
Processing Fee
One-time processing fee as per bank norms. Non-refundable and payable upfront at the time of application.
Stamp Duty & Legal
Stamp duty on guarantee instrument and legal documentation charges as applicable under state laws.
Amendment Charges
Charges for any modification, extension, or enhancement of the bank guarantee as per bank policy.
Key Features & Benefits
Business Credibility
Enhances trust with business partners
No Cash Outflow
Avoid blocking working capital
Quick Processing
Fast issuance for urgent requirements
Flexible Tenure
As per contract requirements
Wide Acceptance
Accepted by govt & private entities
Expert Support
Guidance on guarantee types
Process Flow
Application Submission
Submit filled application with required documents
Document Verification
Bank verifies all submitted documents and assesses risk
Credit Appraisal
Assessment of creditworthiness and collateral valuation
Sanction & Documentation
Guarantee sanctioned and legal documentation completed
Security Creation
Margin deposit/collateral security finalized
Issuance of Bank Guarantee
Bank Guarantee issued to beneficiary
Need a Bank Guarantee for Your Business?
Visit our branch or contact us for Bank Guarantee services
Business Services
Popular Guarantees
- Performance Guarantee
- Bid Bond Guarantee
- Financial Guarantee
- Advance Payment
- Retention Money
- Customs/Excise
What You Need
- Business registration documents
- KYC documents
- Financial statements
- Contract/Tender copy
- Collateral security
Where to Apply?
Visit any branch in Jaipur, Kishangarh (Ajmer), Palanpur (Gujarat) or contact Head Office.
Need Assistance?
Our business banking team is ready to help you with Bank Guarantee requirements.