bank guarantee

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Satendra (Querist)
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14 November 2008 What is the between financial guarantee and performance guarantee with regard to bank? why charges for the both are different?

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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14 November 2008 Financial guarantee is guarantee for payment of amount due by a person to another, whereas the performance guarantee is for guaranteeing the performance like supply of goods etc., on time.

Satendra

Satendra (Querist)
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15 November 2008 performance guarantee is also for payment of amount due by a person to another then how can one diffrentiate between the two

Ravikumar.G

Ravikumar.G (Expert)
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17 November 2008 BANK GUARANTEE is an irrevocable commitment by a bank to pay a specified sum of money
in the event that the party requesting the guarantee fails to perform the promise or discharge
the liability to a third person in case of the requestor's default.