1.The bank guarantee facility shall be extended to long-standing customers of the bank (having regular transaction for a minimum period of one year) in written request. 2. The bank guarantee shall be issued against the security of fixed deposits of the full amount. 3. The fixed deposit receipts should be duly discharged as security for the guarantee and bank lien to be noted on the fixed deposit receipt.
4. The customer should execute a demand promissory note to the extent of the amount of guarantee and on agreement in favor of the bank in the prescribed form. 5. The customer should execute a counter guarantee in favor of the bank in the prescribed form. 6. If any liability under the guarantee is to be met by the bank as per the terms of the guarantee payment there to be made would be treated as a loan against deposit held with the bank/loan against the property mortgaged. 7. Commission at the rate of 3% is charged for the guaranteed amount. 8. Guarantee will be limited within the over all limits as per the norms prescribed by RBI/NABARD and guidelines issued by RBI/NABARD from time to time shall be applicable to the guarantee. 9. The maximum amount of guarantee that can be issued in individual case shall not exceed Rs.25 lakh. 10. The maximum amount of guarantee issued by the bank should not exceed the owned fund of the bank.
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