Document background
The Earnest Money Deposit Bank Guarantee is a fundamental document in Indian tender processes, required when participating in public or private sector bids. It is used when a bidder needs to provide security for their tender participation without tying up liquid funds. The guarantee amount typically ranges from 1% to 5% of the tender value, with the bank undertaking to pay this amount if the bidder withdraws their bid or fails to accept the award. This document follows strict formatting requirements under Indian banking regulations and RBI guidelines, requiring careful attention to validity periods, invocation conditions, and jurisdictional requirements. The guarantee serves as a risk mitigation tool for tender issuers while facilitating broader participation in tender processes by reducing the need for cash deposits.
