A “Retention Bank Guarantee” is a type of financial instrument issued by a bank to secure retention amounts held by a client or project owner in construction contracts. Retention is a portion of the contract price retained by the client until the completion of the project or a specified milestone. It serves as a form of security to ensure that the contractor fulfills its obligations and completes the project satisfactorily.

In construction contracts, a retention amount is usually withheld by the client (often a percentage of the contract price) as security against any defects, deficiencies, or non-compliance with contract specifications by the contractor.

Retention bank guarantees provide an additional layer of security for clients in construction contracts, ensuring that funds are available to cover any potential liabilities or deficiencies during the construction process. They also offer assurance to contractors that their funds will be released promptly upon completion of the project in accordance with the contract terms.