EARNEST MONEY
(I) It is a security against loss, in the event of contractor failing to under take the contract or to furnish the required security within the appointed time after the acceptance of his tender or until such time as the sums due to him form a sufficient guarantee.
(II) Amount of Earnest Money : The tender shall be required to deposit earnest money with the tender for the due performance with the stipulating to keep the offer open till such date as specified in the tender under the condition of tender. The earnest money shall be 2% of the estimated tender value as indicated in the tender notice. The earnest money shall be rounded to the nearest Rs. 10/-. This earnest money shall be applicable for all modes of tendering. The Earnest Money of the requisite amount is required to be deposit either in cash with the Chief Cashier or in any of the following form :-
(i) Deposit receipts pay orders & demand drafts. These forms of earnest money could be either of the State Bank of India or of any of the Nationalized banks. No confirmatory advice from Reserve Bank of India will be necessary.
(ii) Deposit Receipts executed by the scheduled banks (other than the State Bank of India and the Nationalized Banks) approved by the Reserve Bank of India for this purpose. The Railways will not, however, accept deposit receipt without getting in writing the concurrence of the Reserve Bank of India. No interest will be payable upon the Earnest Money and Security Deposit of amounts payable to the contractor under the contract. Standing earnest money deposit (EMD) The practice of following earnest money deposit (EMD) has been dispensed with :
