It depends on the terms of the bank guarantee.
During the validity of bank guarantee it can be encased at any point of time.
If it has expired after the period for which it was given it can not be enforced any more.
Regarding bank guarantee encashment
Sir, I have a bank guarantee from my customer with expiry date (claim date) on 18th July 2020. The branch from where the bank guarantee is issued is closed due to corona virus infections for 14 days and will reopen on 20th July 2020. In case, my customer doesnt renew this bank guarantee can i encash it on 20th July 2020.
Asked 4 years ago in Civil Law
17 Answers
Yes, you can encash it, At least you send a email to Bank, Branch manager, Head Office and Customer Services.
So the Bank should not deny later that you want perform the transaction before expiry date. Mention all details of COVID 19 lock down of your area etc.
Dear Sir,
You may very well encash the bank guarantee on 20 July 2020, if the same is not renewed by the client.
Yes if he doesn't and it's in your agreement to encash you can
yes you can after giving your customer a prior notice that you will be encashing the BG
Dear Sir,
You can encash it on 20th July, 2020. Please give a prior notice to the bank manager through email and/or through customer care with all the details expressing your intention to encash it.
Best wishes.
What are reasons for encashment of BG
Has customer committed breach of contractual obligations
1. Govt. declared lock-down period, shall be exempted for calculating legal limitation periods and further excluded for the mentioned bank guarantee. This is also applicable also for cheques whose validity period expires during lock down periods. Just ensure that you have documentary evidences that said Branch was not functional during the lockdown days. Bank might have put notice outside its gate /shutters.
2. Conclusively you will be able to encash to Bank Guarantee immediately after lockdown period ends.
Please wait till 18th July,2020 for any new policy decision, declaration and ordinance of State or Central Government.
On 19th July,2020 looking all circumstances and facts you may take decision as per terms and your convenience. Not before 19th July 2020 and 20th July 2020 .
If the Bank is open, No prohibitory order and No renewal of Bank guarantee exercised then you may encase it.
It will expire by 18th. Only retrieve, send intimation to bank via email to en cash BG. This way possible that BG will be effective on 20th.
At least process to en cash will done on same day on your intimation.
You talk to your customer about it before taking any step in hasty.
Since the bank's branch is sealed down due to the current pandemic situation, the customer may also be having a problem in renewing it, hence better talk to your customer and then to the bank manager before finalising any action.
Since the bank is closed as on the date of the renewal, the time for renewal may be automatically extended, hence you may take a cautious step.
Yes
A Bank Guarantee can be en-cashed any time.
Subject to complying the terms and conditions of the BG.
Before en-cashing the BG, it is advisable to inform your customer in writing.
you can encash BG on 20 july.
Yes of course.
- As per the direction of the Government of India and Supreme Court , all the limitations of contract/cases /agreement has been extended for the period of lockdown in that area.
- This extension of lockdown also applied in banking sector as well.
- If the said bank was closed due to corona virus for 14 days , then the limitation of the said bank gurantee will be also extended for the said period.
No you cannot encash the bank guarantee on 20 july because it is a guarantee so it is to be renewed in any condition if the purpose for which bank guarantee was given is not cleared.
