Eligibility : Existing customers of the Bank and whose past dealings have been found satisfactory
Normally, this type of guarantee is required by the customers when he desires to purchase machinery or goods on credit. The Deferred payment Guarantee contains an undertaking on the part of the Bank to guarantee due payment of the deferred instalments by the customers on the due date and declare that in the event of default in payment, the bank would make the payment.

Period of Guarantee: For a period up to 5 to years. In exceptional cases it may be extended for a maximum period up to 10 years on merits of each case.

Margin: 25% cash margin on the cost of machinery/equipment to be acquired less initial advance paid to the supplier plus interest portion i.e. on the DPG amount.

Rate of commission: Rs.100+0.75% per quarter or part thereof with a minimum of 3% is the normal rate of metropolitan, urban and semi-urban branches.

For rural branches the rate of commission is Rs.80+0.75% per quarter or part thereof with a minimum of 3%.

In respect of DPGs secured by 100% cash margin or by 100% term deposits, only 25% of the applicable rate on issue of such guarantee with a minimum of Rs.28 only, are leviable.

Security: Security provided for the guarantee may be in the form of our own deposits or other acceptable tangible security, such as GP Notes, Insurance Policies having adequate surrender value and easily marketable shares.

Mortgage of immovable property may be accepted as security only in exceptional cases where customers are well known, provided at least 25% of the guarantee amount is covered by cash margin.

In addition to the counter guarantee and collateral security, an indemnity Policy of Insurance company is also insisted upon.

Security: Security provided for the guarantee may be in the form of our own deposits or other acceptable tangible security, such as GP Notes, Insurance Policies having adequate surrender value and easily marketable shares.

Mortgage of immovable property may be accepted as security only in exceptional cases where customers are well known, provided at least 25% of the guarantee amount is covered by cash margin.

Commission: Rs.100/-plus 0.75% or 0.5% per quarter or part thereof towards financial or performance guarantee respectively.

Security : Security provided for the guarantee may be in the form of our own deposits or other acceptable tangible security, such as GP Notes, Insurance Policies having adequate surrender value and easily marketable shares

Mortgage of immovable property may be accepted as security only in exceptional cases where customers are well known, provided at least 25% of the guarantee amount is covered by cash margin.

Guarantees on behalf of constituents who are selling agents/lottery tickets/airline tickets in favour of Govt departments, Airlines, and other companies in lieu of cash deposit or earnest money.

Limits for opening letters of credit should be fixed based on the overall consumption of the items, to be procured through letters of credit, separately. The limit may be fixed for a single transaction or as a regular limit.

Where the customers desires to have finance from the bank to clear the bills arising out of the letter of credit, suitable limits by way of key loan or cash credits may be considered along with

Inland letters of credit are usually opened for periods ranging between 3 months to 6 months and in case these are to be opened for longer periods, there should be justifiable grounds.

The documentary inland letter of credit established by branches may call for bills of exchange payable at sight or (with prior permission of the sanctioning authority) call for usance bills of exchange on D/A terms. In case the bills are drawn on D/A basis, the payment to the beneficiary should be made only at maturity.

Existing customers enjoying satisfactorily conducted credit limits with the Bank.

Before discounting bills co-accepted by other Banks , the branch should obtain a written confirmation of the concerned controlling office of the accepting bank and a record of the same should be kept.

Mortgage of immovable property may be accepted as security only in exceptional cases where customers are well known provided at least 25% of the guarantee amount is covered by cash margin. However the minimum cash margin to be obtained in the case of partly secured guarantees varies depending upon the quantum of the guarantee and the level of the sanctioning authority as indicated in the discretionary power chart.