When ePBG comes into the picture
If the bid requires a performance security, the winning seller must furnish it after the contract is awarded, within the time stated in the bid. On GeM this is the ePBG — a performance bank guarantee issued electronically by your bank. It protects the buyer if you do not perform the contract. Not every bid asks for it; the bid states whether it applies.
Read the requirement before you bid
- ✓Whether ePBG is required at all
- ✓Percentage of the contract value
- ✓Validity: how long it must stay in force — usually covering the contract and warranty period plus a margin the bid specifies
- ✓Time allowed after contract award to submit it
- ✓Any format or bank requirements
Arrange the guarantee with your bank early
A bank guarantee uses your credit limit or needs margin money, and banks take time to process it. Talk to your bank before you bid on large contracts, so that if you win you can issue the guarantee within the deadline. Check with your bank that it can issue the guarantee in electronic form as required, in favour of the correct beneficiary named in the contract.
Submitting it on GeM
Once your bank issues the guarantee, enter its details against the contract on GeM — guarantee number, amount, issuing bank and validity — and upload the document if asked, exactly as the contract requires. Check that the amount and validity match the requirement; a guarantee that is short by a day or a rupee can be returned.
Details to check on the guarantee before you submit
- ✓Beneficiary: the buyer organisation exactly as the contract names it
- ✓Amount: at least the percentage of contract value the contract asks for, worked out on the final contract value
- ✓Validity and claim period: until the date the contract requires, not just the delivery date
- ✓Contract reference: the GeM contract number on the guarantee, so it can be matched to your order
- ✓Your firm's name as registered on GeM, and the issuing bank branch details
What happens if you do not submit it
Failing to submit the performance security in time is a breach of contract terms. The buyer can cancel the contract and take action under GeM's terms, which can include forfeiting EMD where one was paid. If your bank is delayed, inform the buyer before the deadline and keep proof of your application.
Extension and release
If delivery or warranty is extended, the buyer may ask you to extend the guarantee's validity. After the contract and warranty obligations are complete, the buyer releases the guarantee; ask for the release in writing so your bank can cancel it and restore your limit. Price the cost of the guarantee into your bid.
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Frequently asked questions
What percentage is ePBG on GeM?
It is a percentage of the contract value stated in the bid. It varies by bid and by the rules applicable at the time, so read the bid.
How many days do I get to submit ePBG?
The time allowed after contract award is stated in the bid/contract. Arrange the guarantee with your bank in advance so you can meet it.
When is ePBG released?
After the contract and warranty obligations are fulfilled and the validity period required by the bid has run. Ask the buyer for a written release.
Can I start supply before submitting ePBG?
Follow the contract. Many buyers expect the performance security within the stated time regardless of delivery, and a delay can lead to cancellation.
Who bears the cost of the bank guarantee?
The seller. Bank charges and the use of your credit limit are a cost to include in your bid price.
What if the bank issues the guarantee with a mistake?
Do not submit it as it is. Ask the bank to amend or reissue it before the deadline, because a guarantee with the wrong beneficiary, amount or validity can be returned by the buyer, and the time to submit keeps running.
Should I talk to my bank about ePBG before bidding?
It is not required, but it is sensible on large contracts. Tell your bank before you bid that you will need an electronic guarantee if you win, so the limit and margin are settled in advance and you do not miss the deadline.
Related guides
Rules change. Always confirm the details in the bid document and on gem.gov.in before you bid. · Updated 2026-11-02
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