Counter bank guarantee refers to guarantee issued in favour of another bank or backed by another bank to support issuance of a bank guarantee or trade facility. It creates contingent exposure and must be assessed for enforceability, expiry, and counterparty risk. In MSME underwriting, it supports the bank’s secondary repayment comfort by identifying what security is available, who owns it, how it is valued and whether the charge can be enforced. For example, a counter guarantee can support a bank-guarantee exposure, but the enforceability and financial strength behind it still need review. It matters because collateral can reduce loss severity, support sanction conditions and improve exposure comfort when business cash flows are volatile. The common mistake is to rely only on stated value; title defects, prior charges, documentation gaps and valuation haircuts can materially weaken security comfort.