Bank Guarantee (BG) Commission & Margin Calculator
What are the total bank commission fees, cash margin lien, and claim period charges for issuing a Performance or Financial Bank Guarantee?
Financial Inputs
Guarantee amount required by the tender or project principal.
Performance BGs carry lower credit risk and lower commission than Financial BGs.
Tenor of the underlying commercial agreement or contract execution.
Additional window allowed for the beneficiary to lodge claims.
Bank issuance commission per annum.
Fixed Deposit collateral required by the bank.
Applicable state stamp duty on indemnity and guarantee deeds.
Bank Guarantee Issuance Commission
For a ₹100 Lakh PERFORMANCE Bank Guarantee with 12 months validity (+ 3 months claim period):
Mandatory Cash Margin (FD Lien)
15,00,000
Total Direct Issuance Charges
2,20,750
Total Upfront Liquidity Required
17,20,750
Key Financial Takeaways
- For a ₹100 Lakh PERFORMANCE Bank Guarantee with 12 months validity (+ 3 months claim period):
- Total bank issuance commission is ₹218.75 Thousand (at 1.75% p.a.).
- The issuing bank will require a 15% cash margin (Fixed Deposit with bank lien) of ₹15 Lakh until the original guarantee is formally discharged.
Frequently Asked Questions
What is the distinction between a Performance BG and a Financial BG?
A Performance BG secures the performance of a commercial contract (e.g., EPC construction, supply timelines). A Financial BG guarantees a direct monetary payment or repayment obligation (e.g., advance payment security, customs duty deferment). Financial BGs carry higher credit risk and attract higher bank commission and margin.
Can the cash margin be reduced if 100% immovable property collateral is provided?
Yes. Commercial banks frequently reduce cash margin requirements from 25% down to 5%–10% (or even 0% for AAA-rated borrowers) if prime commercial or industrial real estate collateral is mortgaged to the bank.
Calculators on this platform provide indicative mathematical estimations based on industry-standard financial appraisal models (including Tandon Committee Method II, Nayak Turnover Method, and standard compound amortisation).
They do not constitute a formal facility sanction, credit commitment, or legal advisory from SME PAISA or any partner banking/NBFC institution. Final terms, interest margins, security stipulations, and credit sanctions remain strictly subject to formal credit appraisal, audited balance sheet verification, CMA Data assessment, and risk committee approval by institutional lenders.
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