Surety bonds can be substitute for bank guarantee acceptable in government procurement’s

Union Finance Minister Smt. Nirmala Sitharaman announced in Union Budget 2022-23 speech that in order to reduce indirect cost for suppliers and work-contractors, the use of surety bonds as a substitute for bank guarantee will be made acceptable in government procurements.

General Financial Rules (GFRs) 2017 have been revised vide OM No. F.1/1/2022-PPD dated 02.02.2022 permitting use of surety bonds as security instrument in government procurements.