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Jayanta (Service)     16 February 2009

Bank Guarantee

As per foreign supply order, we are taking Bank Guarantee from Foreign Supplier for advance payment, which is not transferrable and subject to the laws of India & Indian judicature. My question how a foreign bank can give a guarantee when it is not aware of Indian rules. It should have been subject to the judicature of the rules in the country where from Guarantee is issued.Please enlighten me.
Regards,
Jayanta
16.2.09




Learning

 6 Replies

A. A. JOSE (LAWYER; LEGAL ADVISER/CONSULTANT& TRAINER)     16 February 2009

Dear Jayanta,


Normally,  foreign Banks give Bank  Guarantees through their branches, if any, located in India.  Further,  any BG given by a foreign Bank has to be endorsed  by a local Indian Bank  like the SBI.  If the  Purchaser stipulate a condition that the BG should be endorsed by an Indian Bank,  and that the BG will be governed by the Indian Law, the  suppliers will arrange to obtain such a BG and it is the normal practice also.


 


With best wishes, 


 


 

P.Elamaran (Law Officer in a CPSU)     16 February 2009

Dear Mr Jayanta,


A BG issued by a foreign bank is accetable in India provided the same is confirmed or endorsed by a bank in India immediately on its receipt. Moreover, an Indian purchaser will always insist on issuance of a BG as per the terms and conditions stated in the Bid or Contract Documents.

Prakash Yedhula (Lawyer)     16 February 2009

Find attached the proforma of a bank guarantee with instructions which would be useful and give a clear picture. 


Attached File : 25 proforma of bank guarantee.pdf downloaded: 469 times

P.Elamaran (Law Officer in a CPSU)     16 February 2009

Even a bank guarantee issued by a foreign bank, the same has to be subjected to Indian stamp duty. Suppose, such BG has not complied with the appropriate amount of satmp duty, it has to be adjudicated before the Collector of Stamps of the place where it was received. The stamp paper adjudication has to be done within 3months from the date of receipt of the BG in India.

Abhishek (law student)     17 February 2009

sir Y. Parkash had posted a wonderful web link....very relevant...

Amardeep Srivastava (Senior Law Officer)     20 May 2010

Can anybody advise what is the stamp duty applicable for bank guarantee issued at Haridwar. Thanks

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