Bank Guarantee


Bank guarantee is a guarantee from a lending institution ensuring that the liabilities of a debtor will be met if the debtor fails to settle a debt.

For example, if an Indian Company wants to import machines from USA. The importer pledges a physical asset in the Bank and the Bank will issue a Bank Guarantee of certain amount subject to certain conditions which is given to the seller. In the event if the buyer does'nt pay the money the bank will take over the asset and make the payment.

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