- We issue Bank Guarantee u/s 126 of the Indian Contract Act’ 1873.
- Usually financial guarantee in lieu of earnest money or security money for principal debtor’s participation in tenders, claim of excise, custom duty etc. is issued.
- Usually Bank issues Bank Guarantee for a maximum period of 12 months. However, in exceptional cases Bank Guarantee is issued for a period beyond 12 months depending upon the past records of the applicant.
- a) Upto Rs. 5.00 crore – commission is realized @ 2.75% p.a. + Rs. 250.00 as handling charge.
b) Portion above Rs. 5.00 crore commission is realized @ 2.50 % p.a. + Rs. 250.00 as handling charge (minimum guarantee Commission - Rs. 400.00).
c) For Bank Guarantee with 100% cash margin commission is 25% of the applicable charge.
- For Guarantee less than one year minimum commission for one year is taken.
- If the Guarantee is tendered for cancellation before the date of expiry, an amount computed at half the original rate for the unexpired period (less than 3 months grace period) is refunded.
- No commission is refundable if Guarantee is released after fulfillment of its conditions in a period shorter than that covered by guarantee.