BG Categories

Types of Bank Guarantees

Understand different BG types and find the right one for your business needs.

Choose the Right Guarantee

Each type of Bank Guarantee serves a specific purpose. Here's what you need to know.

A commitment that the applicant will fulfill contractual obligations. If the applicant fails to perform, the beneficiary can invoke the guarantee.

Typical Amount: 5-10% of contract value
Validity Period: Contract duration + claim period

Guarantees payment of a specified amount to the beneficiary. Used when financial obligations need backing from a bank.

Typical Amount: As per payment obligation
Validity Period: As per payment schedule

Protects the buyer when advance payment is made. Ensures refund if the supplier fails to deliver goods or services.

Typical Amount: Equal to advance amount
Validity Period: Until delivery/completion

Ensures the bidder will honor their bid if selected. Protects against withdrawal of bids after submission.

Typical Amount: 1-5% of bid value
Validity Period: Until contract award

Bid Bond / Tender Guarantee is commonly used during bidding phases.

Yes, many businesses maintain multiple BGs based on different contracts and obligations.

Validity depends on contract duration, payment schedules, and beneficiary requirements.

Yes, amendment requests can be processed digitally as per bank policy and approvals.