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PPB Capsule Cards PRO Contracts of Guarantee &a…
If the creditor formally releases the principal debtor from the debt, does the guarantor still have to pay?
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Discharge of Principal Debtor
Contracts of Guarantee & Bank Guarantee 52
WA 52
PPB Capsule Cards PRO Contracts of Guarantee &a…
If a bank has two guarantors for a loan and decides to legally release Guarantor A, does Guarantor B also get released?
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Release of Co-surety
Contracts of Guarantee & Bank Guarantee 47
WA 47
PPB Capsule Cards PRO Contracts of Guarantee &a…
What happens to a continuing guarantee if the bank receives notice that the guarantor has died?
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Death of Surety
Contracts of Guarantee & Bank Guarantee 43
WA 43
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What is the status of a guarantee if the bank obtained it by hiding material facts about the borrower's past defaults?
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Misrepresentation by Creditor
Contracts of Guarantee & Bank Guarantee 41
WA 41
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Does a contract of guarantee require the surety to receive direct monetary consideration from the creditor?
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Consideration in Guarantee
Contracts of Guarantee & Bank Guarantee 40
WA 40
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PPB Capsule Cards PRO Contracts of Guarantee &a…
What does Section 128 of the Contract Act state about the fundamental nature of the surety's liability?
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Liability of Surety
Contracts of Guarantee & Bank Guarantee 40
WA 40
PPB Capsule Cards PRO Contracts of Guarantee &a…
Can a surety simply cancel a continuing guarantee whenever they want, and if so, what is the effect?
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Revocation by Notice
Contracts of Guarantee & Bank Guarantee 40
WA 40
PPB Capsule Cards PRO Contracts of Guarantee &a…
If a bank and a borrower secretly change the terms of a guaranteed loan without telling the guarantor, what happens?
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Variance in Terms
Contracts of Guarantee & Bank Guarantee 40
WA 40
PPB Capsule Cards PRO Contracts of Guarantee &a…
Does a bank lose its right against the guarantor simply because it delayed suing the defaulting borrower?
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Forbearance to Sue
Contracts of Guarantee & Bank Guarantee 40
WA 40
PPB Capsule Cards PRO Contracts of Guarantee &a…
How does Section 126 of the Indian Contract Act define a 'Contract of Guarantee'?
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Definition of Guarantee
Contracts of Guarantee & Bank Guarantee 39
WA 39
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PPB Capsule Cards PRO Contracts of Guarantee &a…
What is the legal term for a guarantee that extends to a series of transactions over time, and how is it defined?
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Continuing Guarantee
Contracts of Guarantee & Bank Guarantee 39
WA 39
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If a guarantor pays off the entire loan to the bank, what rights do they gain over the borrower's pledged assets?
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Surety's Right to Securities
Contracts of Guarantee & Bank Guarantee 37
WA 37
PPB Capsule Cards PRO Contracts of Guarantee &a…
What is the difference between a Financial Bank Guarantee and a Performance Bank Guarantee?
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Types: Financial vs Performance
Contracts of Guarantee & Bank Guarantee 34
WA 34
PPB Capsule Cards PRO Contracts of Guarantee &a…
Under what specific circumstance will a court grant an injunction stopping a bank from paying an invoked bank guarantee?
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Exceptions: Fraud in BG
Contracts of Guarantee & Bank Guarantee 32
WA 32
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What is the difference between the 'validity period' and the 'claim period' in a Bank Guarantee?
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Validity vs Claim Period
Contracts of Guarantee & Bank Guarantee 31
WA 31
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Besides fraud, what is the other major exception where courts may stop payment of a Bank Guarantee?
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Exceptions: Special Equity
Contracts of Guarantee & Bank Guarantee 30
WA 30
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Is a Bank Guarantee legally dependent on the underlying contract between the buyer and the seller?
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Bank Guarantees: Independence
Contracts of Guarantee & Bank Guarantee 28
WA 28
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Once the surety pays the bank for the borrower's default, can the surety recover that money from the borrower?
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Implied Promise to Indemnify
Contracts of Guarantee & Bank Guarantee 34
WA 34
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What must a banker meticulously verify before making a payment against an invoked bank guarantee?
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Proper Invocation of Guarantee
Contracts of Guarantee & Bank Guarantee 31
WA 31
PPB Capsule Cards PRO Contracts of Guarantee &a…
If three people guarantee a Rs. 30,000 loan equally, and the borrower defaults, how is liability shared?
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Co-sureties Liability
Contracts of Guarantee & Bank Guarantee 30
WA 30
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Contracts of Guarantee & Bank Guarantee — JAIIB PPB Capsules

India's #1 short-form JAIIB preparation app. 500+ capsule cards, unlimited mock tests & PDF notes for JAIIB May & Nov 2026 (PPB, IE-IFS, AFM, RBWM). Learn while commuting. Clear JAIIB in your first attempt. Join 5,000+ bankers.

All 20 cards on this page
Discharge of Principal Debtor If the creditor formally releases the principal debtor from the debt, does the guarantor still have to p… Release of Co-surety If a bank has two guarantors for a loan and decides to legally release Guarantor A, does Guarantor B als… Death of Surety What happens to a continuing guarantee if the bank receives notice that the guarantor has died? Misrepresentation by Creditor What is the status of a guarantee if the bank obtained it by hiding material facts about the borrower's… Consideration in Guarantee Does a contract of guarantee require the surety to receive direct monetary consideration from the credit… Liability of Surety What does Section 128 of the Contract Act state about the fundamental nature of the surety's liability? Revocation by Notice Can a surety simply cancel a continuing guarantee whenever they want, and if so, what is the effect? Variance in Terms If a bank and a borrower secretly change the terms of a guaranteed loan without telling the guarantor, w… Forbearance to Sue Does a bank lose its right against the guarantor simply because it delayed suing the defaulting borrower? Definition of Guarantee How does Section 126 of the Indian Contract Act define a 'Contract of Guarantee'? Continuing Guarantee What is the legal term for a guarantee that extends to a series of transactions over time, and how is it… Surety's Right to Securities If a guarantor pays off the entire loan to the bank, what rights do they gain over the borrower's pledge… Types: Financial vs Performance What is the difference between a Financial Bank Guarantee and a Performance Bank Guarantee? Exceptions: Fraud in BG Under what specific circumstance will a court grant an injunction stopping a bank from paying an invoked… Validity vs Claim Period What is the difference between the 'validity period' and the 'claim period' in a Bank Guarantee? Exceptions: Special Equity Besides fraud, what is the other major exception where courts may stop payment of a Bank Guarantee? Bank Guarantees: Independence Is a Bank Guarantee legally dependent on the underlying contract between the buyer and the seller? Implied Promise to Indemnify Once the surety pays the bank for the borrower's default, can the surety recover that money from the bor… Proper Invocation of Guarantee What must a banker meticulously verify before making a payment against an invoked bank guarantee? Co-sureties Liability If three people guarantee a Rs. 30,000 loan equally, and the borrower defaults, how is liability shared?
Chapters in this paper
Banker-Customer Relationship Principles of Lending, Different Types of Borrowers, and Types of Credit Facilities Essentials of Bank Computerisation Ethics, Business Ethics & Banking: An Integrated Perspective AML- KYC Guidelines Appraisal and Assessment of Credit Facilities Operational Aspects of CBS Environment Ethics at the Individual Level Operational Aspects of KYC Operational Aspects of Loan Accounts Alternate Delivery Channels – Digital Banking Ethical Dimensions: Employees Opening Accounts of Various Types of Customers Types of Collaterals and their Characteristics Data Communication Network and EFT Systems Work Ethics and the Workplace
Modules in PPB
MODULE A: General Banking Operations MODULE B: Functions of Banks MODULE C: Banking Technology MODULE D: Ethics in Banks and Financial Institutions
JAIIB papers
IE-IFS — Indian Economy & Indian Financial System PPB — Principles & Practices of Banking AFM — Accounting & Financial Management for Bankers RBWM — Retail Banking & Wealth Management
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