Bank Surety Letter Template for Indonesia

A Bank Surety Letter is a crucial financial instrument in Indonesian business transactions, commonly used when one party requires financial security from another party's obligations. This document is particularly relevant in scenarios such as construction projects, tender submissions, advance payment security, or performance guarantees. The Bank Surety Letter, governed by Indonesian banking regulations and civil law, represents a bank's legally binding commitment to pay a specified sum to a beneficiary if the principal debtor defaults on their obligations. The document must comply with regulations from Bank Indonesia and the Financial Services Authority (OJK), including specific formatting requirements, mandatory clauses, and authorized signatory provisions. It serves as a risk management tool that facilitates business transactions by providing financial assurance to the beneficiary while helping the principal debtor avoid tying up their own capital.

1. Letter Header: Bank's letterhead, reference number, date, and place of issuance

2. Title: Clear identification as 'Bank Surety Letter' or 'Bank Guarantee'

3. Parties Identification: Full details of the Bank (guarantor), Principal (the party requesting the guarantee), and Beneficiary (the party receiving the guarantee)

4. Guaranteed Amount: The specific amount being guaranteed, stated in numbers and words

5. Underlying Transaction: Description of the primary obligation or transaction being guaranteed

6. Guarantee Terms: Specific conditions of the guarantee, including validity period, claim conditions, and scope of guarantee

7. Claim Procedure: Detailed process for making claims under the guarantee

8. Expiry Details: Clear statement of expiry date and conditions

9. Governing Law: Statement that the surety is governed by Indonesian law

10. Authorization: Bank's authorized signatories' details and signatures