Bank Guarantee

Can someone help me understand how bank guarantee works in India. Have never had to use it. Helping my husband with it. Our bank is hdfc and customer is a state government. Who has to do what? more  

Thanks very much folks more  
Bank Guarantee is normally issued by the bank against 100% Security (E. G. ix deposit) more  
The bank guarantee (BG) is required by customers from their suppliers for complying with the terms and conditions of the contract signed by them. Some customers may accept a BG in lieu of Earnest Money Deposit. A BG may be required for the advance given by the customer. A BG may be required for timely completion and due perfomance of the contract.
Supplier's bank issues a bank guarantee in favour of the customer saying that the bank will pay the amount mentioned in BG to customer on Demand from customer immediately. Bank will issue a BG on your behalf and will put a hold on a certain amount in your bank account, which you are not allowed to withdraw.
Please contact your Relationship Manager in HDFC Bank to know about terms and conditions of various types of BG issued by them and whether the bank will issue a BG for you. more  
BG acts as security to the other party in case there is any non compliance on the part of BG provider. Normally banks ask 100% margin to issue BG But in case of regular customers enjoying good credit rating, that margin could be lower. more  
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