Margin Money & Bank Gaurantee

This query is : Resolved

AMIT KUMAR ROY (Querist)
Follow

15 July 2008 Sir,

i am conducting audit of company. I have to check the Margin Money and Bank Guarantee. so, which documents is required to check the above.what shuold i keep in mind to complete checking of Margin Money and Bank Gaurantee. What is margin money and bank gaurantee.

thanks

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)
Follow

15 July 2008 Bank Guarantee is a non funded facility granted by a bank against the deposit of margins and collateral securities. It is granted in favour of a person who may invoke and cash the amount of guarantee undertaken in the event of non-performance. It is issued for a fixed term and commission is charged accordingly. The terms and conditions are reduced in writing and signed by bank and the person who has taken the guarantee. A chart of guarantees may be prepared and margins given for each guarantee in the form of FDR or otherwise may be noted thereagainst. The service charges/commission may also be noted. This will help in adjusting the expenses on mercantile basis and giving a note under the head of contingent liabilities.

Message likes : 2 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now