Guarantee Redemption Fund

Guarantees are liabilities contingent on the Consolidated Fund of the State in case of default by the borrower for whom the guarantee has been extended.

As per the terms of the Guarantee Redemption Fund of India, the State Government is required to contribute an amount equal to atleast one-fifth of the outstanding invoked guarantees plus an amount likely to be invoked as a result of the incremental guarantees during the year.