How can I cancel a Bank Guarantee?

 How can I cancel a Bank Guarantee and What is the criteria to cancel the bank guarantee?

In order to cancel the bank guarantee, Please refer the below steps:

1-Request your client to return the original guarantee to you(In case of Fixed Expiry). 

2-If the guarantee type provided to them is either Auto-Renewal or open-ended, request the client to provide the NOC(No objection certificate)stating that client has no objection in cancelling the bank guarantee

2-Once the original guarantee is obtained, Prepare a cover letter to bank requesting for cancellation along with the original and arrange for surrender the original along with cover letter

3-Follow up with bank for the cancellation and refund of margin if margin is held by the bank

4-Once cancelled, Save the email for any future reference 

What is criteria to cancel the bank guarantee?

1-Advance Payment guarantee can be cancelled only once the delivery is completed and the advance is fully recovered from the work.

2-Performance guarantee can be cancelled only contractual obligation is fully completed including the DLP period(Defect Liability Period)

3-Tender Bond can be cancelled once the bidding result is is announced and it is converted into contract. Client may request you to replace the tend bond with Performance bond in this stage

Cover Letter to to bank for cancellation of bank guarantee

Date: 17-Mar-2023  ABC Bank PJSC Main Building, PO Box 7656  UAE  Sub: Request letter for cancellation of Bank guarantees Dear Sir,  We refer to the subject and hereby request you to kindly cancel the below mentioned bank guarantee as obligation towards the guarantees is already fulfilled. Attached original bank guarantee and NOC from the client along with this letter for cancellation.  Bank Guarantee No: AKLG1805853 Type of security: APG Original Guarantee Amount: 5,235,317.68  Kindly do the Needful and Oblige.  Yours truly,  Authorized Signatory

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