Retention money · 5–10% of contract value · NHAI, CPWD accepted

Retention money bond — release the cash the obligee is holding back.

On every running account bill, the obligee retains 5–10% as security against future defects. On a ₹100 cr contract that's ₹5–10 cr of working capital trapped for years. An insurance retention bond covers the same obligation and releases the cash to you immediately. No FD. No bank guarantee. No collateral.

Get a retention bond quote → All BG replacements
Premium
0.55–1.10% p.a.
Bond capacity
Up to ₹200 cr
Quote SLA
4 working hours
— 01 — DEFINITION

What a retention money bond does.

A three-party contract — between you, the obligee, and an insurance company — securing the obligee's right to recover defects against the released retention money.

The retention money problem

Every Indian infrastructure contract retains 5–10% of every running account bill until the defect liability period (typically 12–36 months after completion) is over. For an active contractor running 5–10 simultaneous projects, this can mean tens of crores trapped indefinitely in obligees' accounts.

What the bond does

The retention money bond guarantees the same obligation — the insurer pays the obligee on first demand if a defect arises within the bond tenure. The obligee, in return, releases the cash retention to the contractor. Cash returns to your operations. Defect cover stays in place.

— 02 — COMPARISON

Retention bond vs cash retention vs retention BG.

Three ways the obligee can hold security against defects. Only one returns your cash without consuming bank limits.

Dimension
Cash retained / Retention BG
Retention surety bond
Working capital impact
5–10% of contract value blocked, OR FD margin against BG
Cash released to operations
Bank credit limit
CC/OD limit reduced (if BG)
Untouched
Collateral
100% cash retention or 15–25% FD margin
None for standard cases
Annual cost
Opportunity cost on locked cash, or 1.00–1.50% commission + margin opportunity cost
0.55%–1.10% premium only
Defect coverage
Same
Same
Obligee acceptance
Yes
Yes — per tender clause
— 03 — ACCEPTANCE

Obligees that accept retention bonds.

Confirmed per tender, but the following bodies have published clauses or precedent allowing insurance retention bonds in lieu of retention money.

✓NHAI
✓MoRTH
✓CPWD
✓Indian Railways
✓RVNL
✓NHPC
✓NTPC
✓State PWDs
✓Metro corps
✓Port trusts
✓GeM
✓Municipalities
— 04 — COST

Premium economics.

Indicative bands. Final premium depends on tenure, contract risk, and contractor grade.

0.55%
Lower band — strong contractor, short tenure
0.80%
Mid band — typical NHAI/CPWD case
1.10%
Upper band — longer DLP / first-time file
— 05 — PROCESS

How we place your retention bond.

One file. 15 insurers see it simultaneously. They compete on rate.

Tell us the contract

Obligee, contract value, retention rate, accumulated retention, project status, defect liability period.

One file built

Your KYC, financials, work-order list and obligee bond format — standardised into one underwriting file.

Panel sees it

Routed to all 15 surety insurers simultaneously. They quote within 24–48h. We surface them on one sheet.

Bond bound

You pick. We bind. E-stamped bond delivered to your file. Originals couriered within 48h.

— 06 — DOCUMENTS

What we'll need from you.

The platform pre-fills 80% of the file from public sources. The rest is on you.

  • Company KYC · PAN, GST, MOA/AOA or partnership deed
  • Audited financials · last 2 years
  • Provisional financials · current year
  • Work order / contract · for the project the retention bond covers
  • Running account bills · latest certified
  • Retention statement · accumulated retention to date
  • Obligee bond format · sample retention bond wording
  • Work-order list · last 3 years
— 07 — FAQs

Retention bond questions.

Six common questions. Same answers feed the FAQPage schema for Google rich snippets.

What is a retention money bond?
An insurance surety bond that releases the retention money (typically 5–10% of contract value) that an obligee holds back from each running account bill as security against defects. The bond covers the same obligation — the insurer pays on demand if a defect arises within the bond tenure.
How much retention does the obligee usually hold?
Most Indian government and PSU contracts retain 5%–10% of every running account bill until project completion and through the defect liability period. On a ₹100 cr contract that's ₹5–10 cr of working capital trapped for years.
Is a retention bond accepted in place of retention money?
Yes. NHAI, CPWD, MoRTH, Indian Railways, GeM, central PSUs and most state PWDs accept insurance surety bonds in lieu of retention money on a per-tender basis. The acceptance clause is typically in the General Conditions of Contract.
How much does a retention money bond cost?
Premium is typically 0.55% to 1.10% of bond face value per year. Tenure usually matches the defect liability period — 12 to 36 months. Final premium depends on contract risk, contractor grade and bond tenure.
When can I apply for a retention money bond?
Apply once the contract has commenced and you have at least one running account bill certified. You can also apply at final bill to release accumulated retention. Indicative quote in 4 hours, bond delivered in 2–5 working days.
What documents are required?
Company KYC, last 2 years' audited financials, current year provisional, the contract or work order, latest running account bill, the obligee's retention bond format, and details of retention amount accumulated to date.

Release your retention. Keep your defect cover.

Tell us the contract. Four working hours later you have an indicative rate band and the panel availability for your retention bond.

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