Bank Guarantee

PILLAI·S INSTITUE OF RESEARCH AND

MANAGEMENT 

NAME ² 

ANKIT PARMAR  SOUMYA BADRI

53 54

BANK GUARANTEE

PARTIES TO BANK GUARANTEE 
Guarantor Customer Beneficiary

CUSTOMER OF BANK GUARANTEE

TYPES OF BANK GUARANTEE
1. Financial 2. Performance 3. deferred 

Different between bank gurantee and loc
Letters of credit ensure that a transaction proceeds as planned, while bank guarantees reduce the loss if the transaction doesn't go as planned. 

A letter of credit is an obligation taken

on by a bank to make a payment once certain criteria are met 
A bank guarantee, like a line of credit,

guarantees a sum of money to a beneficiary. Unlike a line of credit, the sum is only paid if the opposing party.

C O N G A GA I N S T R S 2 7 0 - C R G R A N T T O S TAT E BA N K 
The Nationalist Congress Party·s (NCP) demand of granting Rs270 crore to the Maharashtra State Cooperative Bank Limited ³ which is in a financial mess allegedly because of its suspicious decisions to give loans to smaller banks and loss-making sugar factories  The decision to give the bank a loan guarantee of Rs270 crore was made at the last cabinet meeting. 

Essar Energy to provide $1bn bank guarantee for Shell's Stanlow refinery 
MUMBAI: Essar Energy will provide a bank guarantee of $1 billion to close the offer it made to acquire Shell's Stanlow refinery in the UK, according to a person who is part of ongoing negotiations with banks. This bank guarantee would be over and above the $350 million that Essar Energy agreed to offer for the assets of Stanlow refinery.

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