Earnest Money Deposit and Performance Bank Guarantee Basics involves an overview of the two common financial instruments required in government tenders — EMD for bidding and PBG for contract performance. While the process itself is usually straightforward, businesses commonly run into avoidable issues along the way. Here are the mistakes we see most often, and how to steer clear of them.
Mistake 1
Missing the EMD deadline and getting disqualified from bidding.
Mistake 2
Underestimating the time needed to arrange a bank guarantee.
Mistake 3
Letting a PBG lapse mid-contract without renewal.
Mistake 4
Not understanding forfeiture conditions before committing to a bid.
How to Avoid These Issues
Most of these mistakes come down to preparation. Having the right documents ready — EMD amount and acceptable payment mode as specified in the tender, Timeline for EMD submission before the bid deadline, PBG amount and validity period required post-award, among others — and understanding the process before you start goes a long way toward a smooth outcome with standard practice under government tender and contract terms.
Quick Reference: What You'll Need
- EMD amount and acceptable payment mode as specified in the tender
- Timeline for EMD submission before the bid deadline
- PBG amount and validity period required post-award
- Bank arrangements for issuing a guarantee, if required
Need Help With This?
Leegal's team handles registration, compliance, and advisory work like this end-to-end, with transparent pricing and a dedicated point of contact throughout.
Call: +91 95721 91163 | Email: mail@leegal.in