Document background
A Counter Standby Letter of Credit is utilized in complex international banking transactions where multiple banks are involved in providing guarantees. This document becomes necessary when a bank that has issued a Standby Letter of Credit requires additional security from another bank to support its exposure. Under Indonesian law, the Counter Standby Letter of Credit must comply with Bank Indonesia regulations, particularly Law No. 7 of 1992 on Banking (as amended) and relevant foreign exchange regulations. The document typically includes detailed provisions for drawing conditions, required documentation, payment mechanisms, and compliance requirements. It's particularly important in international trade and project finance transactions where Indonesian parties or banks are involved, providing an additional layer of security and risk mitigation for the original issuing bank.
