Is it compulsory to create charge for Bank Gurantee with ROC, if not Please provide explanation.
1 Replies
P C Agrawal
(Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad)
(8229 Points)
Replied 24 January 2014
A charge is required to be registered if it is covered under any of the types mentioned in Sec.125(4) of Companies Act 1956. In case of Bank guarantee normally counter-guarantee is given to the Bank and in that case it is not required to be registered since no charge is created on company's property. However, if hypothecation agreement covers bank guarantee also, in that case charge will have to be filed with ROC. Different banks follow different practice in this regard.
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