Insurance guarantee bonds are equipment where insurance companies serve as ‘guarantee’ and provide the financial guarantee that the contractor will meet his bonds in accordance with the approved conditions.
The NHAI insurance guarantee is encouraging the use of the Bond as an additional method of submitting a bid security or performance security deposit.
The Finance Ministry has created e-BG and insurance guarantee bonds with BGS for all government purchases. The insurance guarantee bond, when issued, will be effective and will provide adequate security to NHAI projects, the ministry said.
The ministry believes that India is ready to be the third largest construction market in the world, with the need for bank guarantee in the Indian infrastructure sector will increase by%. Guarantee bonds serve as a viable alternative to bank guarantee. He added that ISB is cost-effective and the infrastructure sector can get huge concessions. The NHAI organized a workshop on Thursday to widely accept insurance guarantee bonds (ISB) and electronic bank guarantee (EBG).
.