Performance Bank Guarantee

Date of Expiry:
Limit of Liability:
Supply Order /Purchase Order/Contract No.;

Bank,
Main Branch,
XXXXXXX,
Pin:-XXXXXXXX

PERFORMANCE BANK GUARANTEE

1. WHEREAS M/S. …………………………………………………………, having its Registered Office at

…………………………………………………………………………………………………………………………………………………….
(hereinafter called the ‘Manufacturer/Supplier) vide the Contract/Purchase Order from
“____________________”, a company incorporated under the Companies act, 1956, having its
Registered and Corporate Office at ___________________________________, India, west Bengal,
India (Hereinafter called “PURCHASER” which expression shall include its administrators, executors,
successors-in-interest) for supply of products/ Spares at a cost of Rs. ……………………. (Rupees
………………………………………………………………………………………………….) being the aggregate value of the
Contract/Purchase Order of which remaining payable amount for the supply stands at Rs.
……………………………….. (Rupees ……………………………………………………………) through opening of ILC/FLC,
subject to fulfillment of obligations of the Contract/Purchase Order by the Manufacturer/Supplier as
per the Contract/Purchase Order No. ……………………………………., DTD:- ………………………………. and
further Amendments thereto.

2. WHEREAS “PURCHASER” has agreed to make payment of the said Contract/Purchase Order Value
through opening of ILC/FLC to the extent of Rs. ……………………….. favoring the manufacturer/Supplier
on receipt of Performance Bank Guarantee of Rs. ………………………. to fulfill the Contract/ Purchase
Order obligations as per the Contract/Purchase Order for supply of various products/spares/services
to PURCHASER.

3. WHEREAS, under the said Contract/Purchase Order, PURCHASER is enlisted to receive good quality
of products/ spares, etc. as per the said Contract/Purchase Order and in conformation thereof a
Performance Bank Guarantee from the manufacturer/Supplier for supply of
products/spares/services, etc. In terms of the said Contract/Purchase Order.
4. AND WHEREAS , for the above purpose , the Manufacturer/Supplier has approached us for issuance
of performance Bank Guarantee on behalf of the Manufacturer/ Supplier, We ( Name of the Bank
issuing PBG) ………………………………………, having our registered office at
………………………………………………………………………………………………………………………………………………. and
Branch Office at …………………………………………………………………………………………………………….., hereinafter
 called “THESURETY”(which expression shall, where the context so admits, include its administrators,
executors, successors-in-interest and permitted assigns) agreed to issue Performance Bank
Guarantee in favour of “ PURCHASER” for Rs. …………………………………… (Rupees
………………………………………………………………………………… Only) as security for the fulfillment of the
obligations of the said Contract/Purchase Order relating to products/spares, quality, performance
said Contract/ Purchase Order relating to Products/spares, quality, performance of the products /
spares. Etc. supplied to PURCHASER by the Manufacturer/Supplier by providing products/ spares.
Etc. as per the said Contract/Purchase Order.

5. We, the Surety, …………………………………………………… (Bank Name) in consideration of the

“PURCHASER” agreed to pay the Manufacturer/Supplier the remaining value of the contract/
Purchase Order through opening of Import ILC/FLC to the extent of Rs. ……………………………………..
(Rupees …………………………………………………………………………… Only). And the Manufacturer/Supplier
agreeing to fulfill the Obligations under the said Contract/ Purchase Order by supplying
products/spares/rendering, etc. to “PURCHASER”, do hereby issue this Performance Bank Guarantee
and agree to pay “PURCHASER” upon first written demand and without any demur or cavil or
argument, any sum or sums within the limit of the Performance Bank Guarantee of Rs.
………………………………. (Rupees ……………………………………………………………………….. Only) as aforesaid
without needing to prove or to show grounds or reasons for the demand for the sum specified
therein.

6. THIS Performance Bank Guarantee is issued as security for fulfillment of various obligations under
the said Contract/Purchase Order by the Manufacturer/Supplier, to be decided by “PURCHASER” at
its sole discretion, for the value not exceeding Rs. ……………………………… (Rupees
………………………………………………………………………… Only).

7. IN case of non-fulfillment of obligation by the Manufacturer/Supplier, “PURCHASER” shall have the

liberty to encash this Performance Bank Guarantee from us by submitting a claim or demand
through E-mail/Swift intimation through their Bank to us and.
a. Our, i.e. the Surety’s liability under this Guarantee shall not be affected by reason of any
variation in the terms of any other Contract /Purchase Order with the Manufacturer /Supplier
and “PURCHASER”, whether with or without our, i.e. the Surety’s knowledge and/or consent or
by reason of any indulgence shown by any of the parties to the other Contract/Purchase Order
about time, performance or any other matter whatsoever.
b. This Guarantee shall come into force on the date of its issue mentioned herein above, i.e. and
shall remain in force until ……………………………...
c. The decision of “PURCHASER” as to whether the terms of the said Contract/Purchase Order and
Amendments thereto and / or the Obligations for the Performance Bank Guarantee have been
fulfilled or not, to be solely decided by “PURCHASER” and the same shall be final and binding on
us, i.e. the Surety.
8. This Performance Bank Guarantee shall not, in any way, limit or diminish PURCHASER’s rights to
enforce all obligations of the Manufacturer/Supplier under the said Contract/Purchase Order and
other amendments thereto.

9. We, the surety, undertake not to revoke this Bank Guarantee during its currency except with the
previous consent of the PURCHASER in writing.

10. NOTWITHSTANDING anything contained herein above:

a. Our liability under this guarantee shall not exceed Rs. …………………………………… (say Rupees
…………………………………………………………………. Only)
b. This Bank Guarantee shall be valid upto ……………………….
c. We, the Surety, are liable to pay the guaranteed amount or any part thereof under this Bank
Guarantee only if you serve upon us a claim or demand through-mail/ Swift on or before
………………………………… (date of expiry).

Dated, this ___________________

(PBG issuing Bank)

Bank Name,
Branch,
Address,
Pin :-XXXXXX