Which of the following statements are not true regarding

Solution

• Statement A – True  o All BGs must have an expiry period and expiry date. RBI guidelines state they generally should not exceed 10 years (though banks may allow longer after assessing ALM impact). • Statement B – True  o BGs are non-fund-based facilities, but banks must maintain capital adequacy requirements against such exposures. • Statement C – True  o Banks must follow Ghosh Committee recommendations, such as issuing BGs in serially numbered security forms and advising beneficiaries to verify their genuineness. • Statement D – False  o Banks can issue BGs in favor of other banks/financial institutions, subject to prudential norms. They are not outright prohibited.