Indemnity Bond: When Banks and Companies Ask for One

An indemnity bond is a written promise to make good any loss another person suffers because they acted on your request. Banks, companies and registrars ask for one when they are about to do something on the strength of your word instead of a court order: issue a duplicate share certificate, pay a deceased relative's deposit without a succession certificate, or replace a lost deposit receipt. If someone with a better claim later appears, the bond lets them recover their loss from you.

What the law says

A contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or by the conduct of any other person, is called a "contract of indemnity."

Section 124, Indian Contract Act, 1872

Section 125 then sets out what the person protected (the indemnity-holder) can recover from you if they are sued over the matter: damages they are compelled to pay, costs of the suit if they acted prudently or with your authority, and sums paid under a reasonable compromise. In plain terms, you take on the risk that the institution would otherwise carry.

Because this is a personal liability, read the bond before you sign it. Check that it names the specific transaction (the folio and certificate numbers, the account or deposit number), that the amount is stated, and whether the liability is joint and several among all signatories. An open-ended bond covering "all claims of any nature" is wider than most situations need.

Lost or destroyed share certificates

For companies generally, rule 6(2) of the Companies (Share Capital and Debentures) Rules, 2014 says a duplicate certificate for one that is lost or destroyed may be issued only with the board's prior consent, on payment of a fee of not more than Rs 50 per certificate, and on reasonable terms such as supporting evidence and indemnity. The rule sets a period of three months for unlisted companies and 45 days for listed companies, counted from submission of complete documents.

For listed companies, SEBI's circular of 24 December 2025 simplified and standardised the paperwork, and duplicates are now issued in demat form. Under the revised procedure:

• If the securities are worth up to Rs 10 lakh on the date of application, you submit a single affidavit-cum-indemnity bond in SEBI's prescribed format, on non-judicial stamp paper of the value required by the Stamp Act of the State where you live.
• If they are worth up to Rs 10,000, an undertaking in the prescribed format on plain paper is enough, and notarisation is not needed.
• Above Rs 10 lakh, you must also give a copy of an FIR, e-FIR, police complaint, court injunction order or an admitted plaint showing the folio, certificate and distinctive numbers, and the company publishes a newspaper advertisement about the loss.
• The stamp duty is to be the higher of the amounts payable on an affidavit and on an indemnity separately.

1. Write to the company's registrar and transfer agent (RTA) reporting the loss and asking for the forms and the value of your holding.
2. If the value is above Rs 10 lakh, lodge a police complaint or e-FIR that lists the folio, certificate and distinctive numbers.
3. Prepare the affidavit-cum-indemnity bond (or the plain paper undertaking for small holdings) on stamp paper of the right value for your State.
4. Submit it with your identity and address proof and your demat account details, and keep the acknowledgement.
5. Track the request with the RTA; the duplicate is credited to your demat account.

Legal Drive's indemnity for a lost share certificate is useful for unlisted companies or where a company asks for its own format. For a listed company, use the format the RTA gives you, since SEBI has prescribed it.

Claims after a depositor dies

RBI's Settlement of Claims in respect of Deceased Customers of Banks Directions, 2025, issued on 26 September 2025 for commercial and co-operative banks, draw a clear line on indemnity:

• Where there is a nominee or a survivorship clause, the bank must not ask the nominee or survivor for any bond of indemnity or surety, whatever the amount.
• Where there is no nominee, no Will and no dispute, and the amount is below the threshold limit (Rs 15 lakh for most banks and Rs 5 lakh for co-operative banks, or a higher limit fixed by the bank), the bank settles on a simplified procedure that includes a bond of indemnity signed by the claimants. No third-party surety is to be taken.
• Above the threshold, the bank settles on a succession certificate, or on a legal heir certificate or an affidavit about the legal heirs together with the claimants' own bond of indemnity, and it may also ask for a surety bond from third parties acceptable to the bank.
• For the contents of a safe deposit locker, the claimants sign a bond of indemnity before removing the contents, unless the claim is settled on probate, a succession certificate or a court order.

The other heirs who are not claiming usually give a letter of disclaimer or no objection, for which a no objection from legal heirs can be adapted. Our guide on claiming a deceased person's bank deposits walks through the full claim.

Lost deposit receipts and other documents

When a fixed deposit receipt, a bank draft or a similar instrument is lost, the bank may ask for an indemnity before it issues a duplicate or pays out, because the original could be presented later by someone else. The same logic applies to other institutions replacing a lost original. These requirements come from each institution's own policy rather than a single national rule, so ask for their checklist first. An affidavit of loss often goes with the bond, and for passports, marksheets and similar documents our guide on lost documents and duplicates explains the police report route.

Stamp duty, notarisation and format

An indemnity bond is a stamp-dutiable instrument (it has its own entry in the Schedule to the Indian Stamp Act, 1899, and in State Stamp Acts), and each State sets its own rate, so there is no single national figure. Buy stamp paper or an e-stamp certificate under your State's law, and if the institution names a value, use at least that. Whether the bond must also be notarised or witnessed depends on what the bank or company requires; SEBI, for example, has removed notarisation for duplicate securities worth up to Rs 10,000.

If an institution refuses to settle a claim despite complete papers, or the heirs disagree, a court document may be needed instead. LegalFirms has a guide on obtaining a succession certificate, and you can also read questions on wills and inheritance that others have asked.