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Conditional Bank Guarantee

Conditional Bank Guarantee Template for Indonesia

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Key Requirements PROMPT example:

Conditional Bank Guarantee

"I need a Conditional Bank Guarantee under Indonesian law for a construction project in Jakarta, where the guarantee amount is IDR 5 billion, payable upon verified project delays exceeding 30 days, with the guarantee period running until March 15, 2025."

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Document background
The Conditional Bank Guarantee is a crucial financial instrument in Indonesian commercial transactions, particularly used in construction projects, international trade, and large-scale commercial deals. It provides security to the beneficiary while protecting the bank's interests through specific conditions that must be met before payment. The document is structured to comply with Indonesian banking regulations, including Law No. 7 of 1992 on Banking (as amended) and Bank Indonesia regulations, while incorporating international banking practices. The guarantee typically includes detailed conditions for payment, claim procedures, required documentation, and specific timelines. This type of guarantee is distinct from unconditional guarantees as it requires the beneficiary to demonstrate compliance with specified conditions and provide supporting documentation before any claim can be honored.
Suggested Sections

1. Parties: Identifies the Bank (Guarantor), the Applicant (Principal), and the Beneficiary

2. Background: Describes the underlying transaction and purpose of the guarantee

3. Definitions: Defines key terms used throughout the guarantee

4. Guarantee Amount and Scope: Specifies the maximum guarantee amount and nature of the guaranteed obligations

5. Conditions for Payment: Details the specific conditions that must be met for the guarantee to be called

6. Claim Procedure: Outlines the process and requirements for making a valid claim under the guarantee

7. Documents Required: Lists the specific documents that must accompany any claim

8. Payment Terms: Specifies the timeline and method of payment upon valid claim

9. Duration and Expiry: States the validity period of the guarantee and expiry conditions

10. Bank's Rights and Obligations: Details the rights, obligations, and limitations of the bank's liability

11. Governing Law and Jurisdiction: Specifies Indonesian law as governing law and defines jurisdiction for disputes

12. Notices: Provides the method and addresses for formal communications

13. Execution Clause: Format and requirements for proper execution of the guarantee

Optional Sections

1. Counter-Indemnity: Required when the applicant must provide specific indemnity to the bank

2. Assignment: Include when transfer or assignment of guarantee rights needs to be addressed

3. Force Majeure: Include when specific force majeure provisions are required beyond standard provisions

4. Anti-Money Laundering Compliance: Include when enhanced AML provisions are required

5. Language: Required when the guarantee needs to be bilingual or specify prevailing language

6. Bank's Independent Obligation: Include to emphasize the independent nature of the bank's obligation from the underlying contract

7. Stamp Duty: Include when specific stamp duty requirements need to be addressed

Suggested Schedules

1. Form of Demand: Template for making a claim under the guarantee

2. Required Claim Documents: Detailed list and format of documents required for claims

3. Specimen Signatures: Authorized signatures for the beneficiary and/or applicant

4. Underlying Contract Details: Summary or extract of the main contract being guaranteed

5. Bank's Standard Terms and Conditions: General terms and conditions applicable to bank guarantees

6. Communication Procedures: Detailed procedures for notifications and communications

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Banking and Financial Services

Construction and Infrastructure

International Trade

Manufacturing

Energy and Resources

Real Estate Development

Government and Public Sector

Telecommunications

Transportation and Logistics

Industrial Projects

Relevant Teams

Legal

Finance

Treasury

Risk Management

Commercial

Procurement

Compliance

Corporate Banking

Trade Finance

Credit Risk

Operations

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Bank Relationship Manager

Legal Counsel

Contract Manager

Risk Manager

Commercial Director

Project Manager

Procurement Manager

Credit Risk Officer

Trade Finance Manager

Corporate Banking Officer

Compliance Officer

Financial Controller

Industries
Law No. 7 of 1992 on Banking as amended by Law No. 10 of 1998: The primary banking law in Indonesia that provides the fundamental framework for banking operations and financial instruments, including bank guarantees
Indonesian Civil Code (Kitab Undang-undang Hukum Perdata): Contains fundamental principles of contract law and specific provisions regarding guarantees (Book III on Obligations)
Bank Indonesia Regulation No. 7/3/PBI/2005: Regulates the issuance of bank guarantees and establishes prudential principles for banks in Indonesia
Law No. 8 of 1999 on Consumer Protection: Provides protection for parties involved in financial transactions, including requirements for transparency and fair treatment
Bank Indonesia Regulation on Risk Management: Governs risk management practices that banks must follow when issuing guarantees and other financial instruments
Law No. 23 of 1999 on Bank Indonesia: Establishes Bank Indonesia's authority to regulate and supervise banks, including their guarantee operations
Financial Services Authority (OJK) Regulation No. 1/POJK.07/2013: Regulates consumer protection in the financial services sector, including banking services and guarantees
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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