Third Party Guarantees :
Advances covered only by the personal guarantee of third parties (except banks and government) in addition to the personal security of the
borrower are not classified as ‘secured’ advances and would be classified as ‘unsecured’ advances in the financial statements.
The guarantee bond executed by the guarantor in favour of the bank may be in bank’s own prescribed form or otherwise. Such bonds are generally executed by holding companies, overseas customers, overseas principals, insurance companies, etc. A letter of continuity is also obtained from the guarantor.