Document background
The Bank Guarantee Covering Letter is an essential document in Indonesian banking practice, typically used when a bank issues a guarantee to secure various business obligations. This document is required whenever a bank guarantee is issued, serving as the formal transmittal letter that accompanies the guarantee instrument. It provides crucial context and authentication for the bank guarantee, including details about the parties involved, the purpose of the guarantee, its value, and validity period. Under Indonesian banking regulations, particularly Bank Indonesia and OJK guidelines, the covering letter must contain specific information to ensure legal compliance and proper documentation of the guarantee arrangement. The document is particularly important in international trade, construction projects, and government tenders where bank guarantees are frequently required as security instruments.
