Bank Guarantee

bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will be met. if the debtor fails to settle a debt, the bank covers it.
bank guarantee enables the customer, or debtor, to acquire goods, buy equipment or draw down loans, and thereby expand business activity.

BG is issued by bank on the receipt of request from the applicant for the guarantee amount towards some purpose / underlying transaction towards the beneficiary.