Cashflow & Bank Financing Optimization

EMD & Bank Guarantee (BG) Cost Calculator

Estimate your exact Earnest Money Deposit cash outflow, performance security bank guarantee value, bank margin cash locked, and annual commission financing fees.

Tender & Guarantee Parameters

Currency:

1. Estimated Tender Value

The estimated project cost as stated in the NIT / RFP document.

₹

= ₹ 5.00 Crores (₹ 500 Lakhs)

2. Earnest Money Deposit (EMD) Rate 2.00%

Typically 1% – 2% for central tenders; up to 3% – 5% in certain state works.

3. Performance Bank Guarantee (PBG) Rate 5.00%

Required upon contract award (normally 3% – 5% per GFR guidelines, up to 10%).

Project Tenure (Months)

Months

Bank FD Margin Money (%)

Bank Guarantee Commission (% p.a.)

% p.a.

MSME & Startup EMD Exemption (GFR 2017 Rule 170)

Under Indian Public Procurement Policy, registered Micro and Small Enterprises (Udyam / NSIC) and DPIIT-recognized Startups are entitled to 100% exemption from EMD in all Central Govt, CPSE, and GeM procurement.

Potential Saving: ₹ 10,00,000

Financing & Liquidity Overview Live Breakdown

Total Cash Liquidity Needed

₹ 13,06,250

(EMD + Bank Margin FD + BG Commission)

Earnest Money (EMD) ₹ 10,00,000

Performance BG Face Value ₹ 25,00,000

Bank Margin FD Locked ₹ 2,50,000

Total Bank Commission ₹ 56,250

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Frequently Asked Questions

Key legal and financial aspects of tender deposits and bank guarantees.

What is the standard EMD percentage in government tenders?

In Indian public procurement (per GFR 2017 Rule 170), Earnest Money Deposit (EMD) typically ranges from 1% to 2% (or up to 5% in certain state tenders) of the estimated tender value.

Can MSMEs and Startups get an EMD exemption?

Yes! Under Rule 170 of General Financial Rules (GFR 2017) and the Public Procurement Policy for MSEs Order 2012, Micro and Small Enterprises registered with Udyam or NSIC, as well as DPIIT-recognized startups, are 100% exempt from paying Earnest Money Deposit (EMD) across all Central Ministries, CPSEs, and GeM procurement portals.

What is Bank Margin Money for Performance Guarantees?

When a commercial bank issues a Performance Bank Guarantee (PBG) on behalf of a contractor, they typically require the contractor to pledge 5% to 25% (or 100% for unsecured contractors) of the guarantee value as collateral in the form of a Fixed Deposit (FD) or cash margin.

How is Bank Guarantee commission calculated?

Banks charge a quarterly or annual commission rate (typically 0.75% to 2.0% per annum) on the total face value of the Bank Guarantee for the entire validity tenure plus a claim period.