Explain the different purposes for which bank guarantees are issued.

Some of the purposes for which Bank Guarantees are issued are: To secure any claims by the buyer on the seller arising from default in delivery or performance of the terms of the contract (e.g. construction, assembly, execution). Due performance of a specific contract undertaken by a customer in favour of Government bodies/ Others. For example supply of materials, Construction of Roads, Buildings Dams, Civil Work, etc. Due performance of an equipment/project after completion for a specific period due to possible defects appearing after delivery during warranty period of the equipment's. Execution of Long Term Infrastructure Projects such as Seaports, Airports, Road Construction, Bridges, Sanitation and Sewerage Projects, Telecommunication Services, Construction of Educational Institutions and Hospitals, Generation/Transmission/ Distribution of Power, etc.