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Bank Guarantees — compared across banks, issued faster.
A Bank Guarantee (BG) is a bank’s written undertaking to pay a beneficiary if you fail to meet a contractual obligation. BharatBG puts your requirement in front of multiple banks at once so you get better commission rates, lower margin lock-in and quicker issuance.
Choose the right BG for your contract
Different stages of a contract call for different guarantee instruments.
Bid Bond / EMD Guarantee
Assures the buyer you’ll honour your bid and sign the contract if awarded — replaces cash Earnest Money Deposit.
Performance Guarantee
Assures the buyer the contract will be executed as per terms; typically 5–10% of contract value.
Advance Payment Guarantee
Covers a mobilisation or advance payment made to you, refundable to the buyer if work isn’t delivered.
Retention Money Guarantee
Lets you receive retained payments upfront by guaranteeing defect-liability obligations instead.
Financial Guarantee
Guarantees a financial obligation such as payment to a supplier or lender on a due date.
Foreign / Overseas BG
Issued via a correspondent bank for contracts with an overseas buyer or counterparty.
Bank Guarantee rates & terms, side by side
Indicative figures for illustration — your actual commission and margin depend on credit rating, collateral offered, tenure and the specific bank’s policy.
| Bank | BG commission (p.a.) | Margin | Min. ticket | Typical TAT | |
|---|---|---|---|---|---|
 State Bank of India | 0.60% – 1.50% | 10% – 25% | ₹1,00,000 | 3–5 days | Apply |
 HDFC Bank | 0.75% – 1.75% | 15% – 25% | ₹2,00,000 | 2–4 days | Apply |
 ICICI Bank | 0.75% – 1.75% | 15% – 25% | ₹2,00,000 | 2–4 days | Apply |
 Axis Bank | 0.80% – 1.80% | 15% – 25% | ₹2,00,000 | 3–5 days | Apply |
 Bank of Baroda | 0.65% – 1.60% | 10% – 25% | ₹1,00,000 | 4–6 days | Apply |
 Punjab National Bank | 0.65% – 1.60% | 10% – 25% | ₹1,00,000 | 4–6 days | Apply |
 Kotak Mahindra Bank | 0.80% – 1.85% | 15% – 25% | ₹2,00,000 | 2–4 days | Apply |
 IDFC FIRST Bank | 0.85% – 1.90% | 15% – 30% | ₹2,50,000 | 2–3 days | Apply |
Indicative ranges only, last reviewed July 2026. Request a quote for firm, current pricing against your specific requirement.
Documents to keep ready
KYC
PAN, GST certificate, incorporation documents, board resolution / authorised signatory list.
Financials
Last 2–3 years’ audited financials, latest provisional statements, bank statements (6–12 months).
Contract documents
The tender/work order/contract requiring the BG, and the exact BG format asked for.
Collateral proof
FD receipt, property papers or other security, if offering collateral instead of full margin.
Existing banking
Sanction letters or facility details if you already bank with the issuing bank.
Why compare via BharatBG
- One documentation set shared across every bank we approach on your behalf.
- Negotiated commission rates from banks competing for your BG business.
- A dedicated case manager chasing issuance internally — you’re not calling the branch.
- Clear guidance on whether a surety bond could reduce your collateral burden.
Bank Guarantee, explained
What is the difference between a Bank Guarantee and a Letter of Credit?
A BG is a fallback promise to pay only if you default on an obligation. A Letter of Credit is a primary payment mechanism typically used to settle a trade transaction directly.
Do I need 100% cash margin for a BG?
Not always. Depending on your credit profile and relationship with the bank, margin requirements can range from around 10% to 25%+ of the BG value, with the balance covered against your sanctioned limits or other collateral.
How long does BG issuance typically take?
Once documentation is complete, banks on our panel typically issue within 2–6 working days depending on the bank, ticket size and whether you’re an existing customer. BharatBG’s case management is aimed at cutting delays caused by incomplete paperwork or slow internal routing.
Can a surety bond replace a Bank Guarantee?
For many government tenders and contracts, yes — insurance surety bonds are now accepted as an alternative to a BG by a growing list of departments and PSUs. See our Surety Bonds page for details.
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