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The Retention Bank Guarantee is a crucial financial instrument in Indonesian construction and development projects, where it serves as a substitute for cash retention typically withheld from contractor payments. This document becomes relevant when a contractor wishes to recover retention money before the end of the defects liability period by providing a bank guarantee instead. The guarantee must comply with Indonesian banking regulations, particularly OJK requirements, and typically amounts to 5-10% of the contract value. It provides assurance to project owners that funds will be available to remedy any defects discovered during the liability period, while allowing contractors to improve their cash flow position. The document includes specific provisions for claims, validity period, governing law, and jurisdictional requirements under Indonesian law.

1. Bank Details and Reference Number: Complete details of the issuing bank and unique guarantee reference number

2. Title: Clear identification as 'Bank Guarantee - Retention Money'

3. Date: Date of issuance of the guarantee

4. Beneficiary Details: Complete name and address of the party receiving the guarantee (typically the project owner)

5. Principal Details: Complete name and address of the party requesting the guarantee (typically the contractor)

6. Project Reference: Details of the underlying construction contract or project

7. Guarantee Amount: The specific amount being guaranteed, both in numbers and words

8. Guarantee Terms: Core terms including validity period, conditions for calling the guarantee, and bank's undertaking to pay

9. Expiry Details: Clear statement of when and how the guarantee expires

10. Claim Procedure: Specific process and requirements for making a claim under the guarantee

11. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and relevant jurisdiction

12. Bank Signatories: Authorized signatures from bank officials with their names and positions