EMD, security deposit or bank guarantee not released: how to get it back

By Gaurav Gupta, Founder & CEO, GGA India

Last reviewed: 9 November 2026

Direct answer. Under GFR 2017, EMD of unsuccessful bidders is returned no later than 30 days after contract award. Performance security stays valid until 60 days after all obligations, including warranty, end, and should then be returned. Most unreleased deposits lack a certificate or a written request. Build one deposit register, file a release pack per office and follow one officer.

GGA India at a glance

GGA India Private Limited is a B2B revenue-realization firm, operating since 2002, headquartered in Gurugram.
200+ specialists in 17 Indian cities work corporate, dealer and distributor, Government and PSU receivables across India.
Success commission is based on cash actually received. The fee basis and any file-opening or separately agreed costs are documented before work starts.
Your customers pay you directly. GGA never receives or holds your money.
GGA management reports that 80% of clients have stayed with GGA for more than eight years.

What is probably going on

Deposits stay unreleased because nobody invoices them, not because anyone decided to keep them. They sit in three records that rarely agree: treasury's BG register, sales' tender file and the accounts ledger. Each instrument has one of four causes:

Release never requested. EMD on lost tenders the bid team left behind; EMD on a won tender never adjusted once performance security was furnished; old DD or cash deposits with a changed paying officer. Test: if the release condition has passed and you have no request on file, this is the cause.
Release certificate missing. Security deposits held from bills wait for a warranty-completion or no-claim certificate never issued. Test: if the contract names a certificate and you do not hold it, this is the cause.
Expired guarantee still renewed. Performance BGs past the 60-day post-warranty window roll over without a discharge letter, while your bank charges commission and holds margin. Test: if your bank shows a live BG with no live obligation behind it, this is the cause.
Forfeited or adjusted. The department intends to keep the deposit against a penalty or recovery. Test: if you hold a forfeiture order or recovery letter, this is the cause — and the only disputed one.

The first three are process-blocked and make up most deposit books.

The pattern behind it. An unreturned deposit or guarantee is money already earned on a contract and never collected, and here the cause is almost entirely inside your company: three records, three departments, nobody whose job is to ask for it back. GGA's fix is a single Invoice Lifecycle Owner for every instrument, from the tender or bill that created it to the day the cash or the discharged guarantee comes home. More on how this runs with Government and PSU buyers.

Your options

A routine release letter with the clause cited recovers most deposits; legal routes are for wrongful forfeiture only.

Exhibit 1: Routes to recover deposits and guarantees, by situation, time and cost

Option	When it works	Typical time	Cost	Effect on the relationship
Release request citing the clause and GFR 2017 Rule 170 / 171	EMD after award; performance security after the 60-day window	2–10 weeks	Internal time	Positive — routine
Request the no-claim or warranty-completion certificate first	Release conditional on a certificate never issued	3–8 weeks	Internal time	Positive
Stop renewing an expired BG, telling the client and your bank in writing	Obligations over and the claim period ended; the bank's liability usually ends with it	Immediate commission saving	None	Neutral if the client is told first
Escalate to the head of finance with the register	Many deposits with one department	4–12 weeks	Internal time	Neutral
MSME ODR portal claim	Registered micro or small supplier; money withheld is a payable for goods or services	Council target 90 days from reference	Low	Firm
Arbitration or suit for refund	Wrongful forfeiture the department will not reconsider	12–24 months; mediation first for a suit	Counsel and fees	Adversarial

Two rule details matter. Since 1 April 2022, Rule 170 returns bid security to bidders who fail the technical stage of a two-stage tender within 30 days of that result. And registered micro and small enterprises are exempt from bid security (tenders may ask for a bid security declaration instead); EMD paid while eligible is worth raising.

What to do this week

One reconciled register shows which deposits are due now and what the expired guarantees cost you.

Build one deposit register: tender number, office, instrument (EMD, PBG, SD, DD), amount, dates, release condition.
Reconcile it with your bank's guarantee list. Each live BG without a live obligation needs a release letter.
Date each release trigger: award (EMD); warranty end plus 60 days (performance security); the named certificate (security deposits).
Batch requests by office: one letter listing every deposit, clause and date.
Ask your bank what each expired BG costs in commission and blocked margin. The CFO will act on that number.

When to bring someone in

Bring in help when the register runs to dozens of instruments across departments and states. Other signs: tender files lost; nobody able to say who signs; blocked margin material to working capital.

What GGA would do

Every deposit gets an owner, a trigger date and a release letter. Government work is documentation and approvals only — not a liaison, not a broker.

Days 1–5: one deposit register merging the three records. You receive: every instrument in one sheet, mismatches flagged.
Week 2: bank reconciliation. You receive: orphan guarantees and what each costs you.
Weeks 2–3: trigger per instrument. You receive: each line marked "due now", "due on date" or "forfeiture or recovery claimed".
Weeks 3–5: batched release requests, plus requests for missing certificates. You receive: one draft per office for your signature.
Month 2 onwards: each file followed. One GGA owner per department tracks the release note, the original's return and the refund. You receive: weekly status by office; discharge letters as they arrive.
Months 2–6: forfeitures examined against the order and clause relied on. You receive: a written view per case; you decide.

For one pharma client, 85% of expired Government deposits and bank guarantees were released or recovered in six months. Fees come only from cash that reaches your bank, on an agreed scale by age; a file-opening fee may apply for legacy or Government cases. GST extra.

What we need from you

Your bank's BG list and your own deposit list are enough for a first view.

To start

Your bank's current list of live bank guarantees
A list of EMDs and security deposits you believe are outstanding (tender number, department, amount)
One contract or bid document showing the security clauses
Any release request already sent

To act

Copies of each BG, DD or EMD receipt
Letter of award or rejection for each tender
Completion, warranty-completion or no-claim certificate per contract
Bill-wise statement of security deposits deducted
Forfeiture or adjustment orders, if any
MSE registration certificate, if you paid EMD while eligible for exemption

Missing some of these? Send what you have — telling you what is missing is part of the first reply.

How you stay in control

Originals come back to you, and only you instruct your bank.

Departments release or refund to you directly. GGA never receives or holds your money.
Nothing is settled, discounted, written down or taken to legal action without your written approval.
GGA manages the communication with your customers; escalation steps are discussed with you.
One named GGA owner per account; monthly report to your CEO and CFO, a fortnightly review call, and an immediate flash report when a risk appears.
Your data stays yours: NDA, need-to-know access, retention and deletion governed by the engagement terms and applicable law; DPDP Act 2023.
Fees agreed in writing before work starts; six-month term, reviewed with you monthly.
Government matters: documentation and approvals only — GGA works the timing and the queue, never the decision.
Original guarantees come back to you, and only you instruct your bank to cancel a BG or stop a renewal.

Send us one unpaid invoice — or one deposit. Email the department or client, city, instrument, amount, issue date and whatever you have from the 'To start' list to gg@ggaindia.co.in. Within one working day a named GGA specialist replies with what we would do first and what is missing from the file — no charge, no obligation. For a whole book, ask for a complimentary Receivables Position Review.

A different situation? Foreign company owed money by an Indian business → India Desk · Indian exporter owed by an overseas buyer → Global Receivables Desk

Frequently asked questions

GFR 2017 sets the clock; the contract names the document.

What is the performance security percentage for Government contracts now?

For goods and services contracts under GFR 2017, the Department of Expenditure set it at 3–5% of contract value from 29 December 2023. Works contracts and individual tenders can differ. Check the bid document you signed.

Our EMD was forfeited. Can we get it back?

Only if the forfeiture was wrong — for example, the department extended time or changed terms itself. Ask for the order and the clause relied on. Where a recovery is properly due, the deposit is adjusted, not refunded.

Is a security deposit deducted from bills the same as retention?

In practice, yes: money held from running bills until the warranty or defect liability period ends, released against the certificate the contract names.

Who signs the release requests and deals with our bank?

You do. Requests go out under your signature, originals come back to you, and only you instruct your bank. GGA manages the communication with departments and discusses escalation with you.

Sources

Every rule cited above traces to one of these.

This page summarises the position as at 9 November 2026. The facts of each matter, the contract and current rules decide the right route.