A Stand By LC Bank Guarantee is a specialized financial instrument commonly used in Indian and international business transactions where one party seeks to provide payment security to another. This hybrid instrument combines the characteristics of both a standby letter of credit and a bank guarantee, making it particularly versatile for cross-border transactions while complying with Indian regulatory requirements. It is typically used when there's a need for a secondary payment mechanism that activates only upon default or non-performance of specified obligations. The document includes detailed terms of the guarantee, validity period, conditions for demand, and specific requirements for claim documentation. Under Indian jurisdiction, these instruments are regulated by the Reserve Bank of India and must comply with the Banking Regulation Act while following international banking practices. The document is particularly crucial in high-value commercial transactions, infrastructure projects, and international trade dealings where parties seek robust payment security.

1. Letter Reference and Date: Unique reference number and date of issuance of the SBLC

2. Issuing Bank Details: Complete details of the bank issuing the SBLC including branch, address, and authorized signatories

3. Beneficiary Details: Full name and address of the party in whose favor the SBLC is issued

4. Applicant Details: Full name and address of the party requesting the SBLC

5. Guarantee Amount: The maximum amount of money the bank guarantees, stated in both figures and words

6. Validity Period: Clear specification of the effective date and expiry date of the SBLC

7. Underlying Transaction: Reference to the underlying commercial transaction or agreement

8. Terms of Payment: Conditions under which the bank will make payment upon demand

9. Demand Requirements: Specific format and documentation required for making a claim

10. Governing Law and Jurisdiction: Specification of Indian law as governing law and relevant jurisdiction