Bank Guarantee

[Girdhari Yadav]

Is this necessary to give a bank guarantee in auto renewal form for any type of bond.

[KASTURI SETHI]

Surety bond does not require Bank Guarantee. It is to be renewed before the date of expiry of the bond. Security bond requires Bank Guarantee. Without renewal of Bank Guarantee, Security Bond is incomplete. The department always keeps watch to protect revenue.

[DR.MARIAPPAN GOVINDARAJAN]

Bank guarantee is for certain period. If the period expires the bank guarantee also expires. In auto renewal if the period of bank guarantee then fresh bank guarantee is to be given. It is my view.

AI Summary

Bank guarantee requirement: security bonds need a current guarantee and lapse on expiry, affecting bond completeness. Bank guarantee requirements differ by bond type: a surety bond does not need a bank guarantee, but a security bond requires a bank guarantee and is incomplete without its timely renewal. Bank guarantees expire at the end of their stated period; where auto renewal is relied upon, a fresh bank guarantee may be necessary to maintain the bond's effectiveness and protect revenue.