Bank Guarantee Process for Accounting

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HI ALL

 

CAN SOME ONE PLEASE EXPLAIN THE PROCESS OF BANK GAURANTEE

i;e  THE BANK ASK FOR 25 % MARGING AND 75 % FUNDED BY BANK  WHAT EXACTLY IT MEANS 

 

SECONLY THE SAY ITWILL BE EPT AS FD FOR THE AMOUNT AND WILL EARN INTEREST 

 

WHAT IFTHE BG IS UNPAID AFTER EXPIRY  WHAT WILL BE ENTRY FOR REVERSAL OF 25 % MARGING AND FOR THE FD INTERESRT EARNED

 

LETS SAY BG AMOUNT IS FOR RS 100000 AND I HAVE GIVEN 25 % BANK MARGING 

Replies (2)

Thank you Rama chari your explanation was crystal clear 

So when we do 25 % fuding  they will do FD equal for that amount right andpay us with interest  when the BG exres and its not invoked 

and when bank does fundng on 100 % marging we dont have option for FD and ban will staright charge thei ban commision 


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