Bank guarantee

Your query did not give full facts of the transaction.  What is the transaction between you and the company and why you are deposting the amount with them. 

As far as Bank guarantee is concerned, it is a guarantee given by the bank on behalf of the applicant and this guarantee is addressed to the beneficiary (who require the Bank guarantee) specifying the limit of amount, expiry date and conditions for invoking (claiming) the guarantee (amount).  You should ask the company/person who is offering Bank guarantee, a proforma, which is to be examined properly and after that you should decide whether it is acceptable to you or not.

Banks issue bank guarantee on the security of margin money and also property securities covering the total amount under the guarantee.  Hence if the company failed to repay the deposited money, the bank which had issued bank guarantee in your favour has to pay the deposit money on behalf of the company.  But normally banks don't issue bank guarantees on behalf of companies against acceptance of deposits.

mr. malipeddi g,

                               the company giving me a franchiese of store in my distt. but i have to deposit them 15 lakhs and they have given me bank guarantee on the deposit money. so i want know that, is there any fruad made if comapny give bank guarantee. can they foerfieted my amount  without any reason. is there any lophole in bank gurantee.

                                                                                                                                                                    thanks to reply me

MR.Jatin

Ask the company a draft bank guarantee which is being offered to you against the deposit money for procuring franchisee from them.  Normally reputed companies enter into franchisee business, hence, prima facie, one need not doubt the transaction.  You gothrough the clauses for claiming the amount from the Bank under the guarantee - these narrative clauses in the text of the guarantee that if case of......bank will pay the amount mentioned in the guarantee to the beneficiary.  The other precaution is verification of genuineness of the guarantee.  On the face of the guarantee bond, the name of the bank, address will be given.  Somewhere in last paragraphs, for verification purpose, to whom you have contact in the Bank will be normally given.  Send a Xerox copy to the Bank/nominated office whether the guarantee is genuine (issued by the Bank or not).  

Forfeting your amount covers under the franchisee agreement.  In the Bank Guarantee briefly it will be mentioned what you are supposed perform.  If you perform that then only you can claim the amount under guarantee that too in case if the company fails to pay you under the contract.  You have read franchisee agreement and Bank Guarantee together to know the risk factors. 

With best wishes

thanks malipeddi g,for giving me an attention on my query thanks a lot.

I agree with Jaggarao.