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The Bank Loan Personal Guarantee is a critical document in Indian banking practice, commonly used when a bank requires additional security beyond the primary borrower's creditworthiness. This document becomes necessary when the loan amount is substantial, the borrower's credit history is limited, or banking regulations require additional security. The guarantee agreement, governed by Indian law, creates a legally enforceable commitment from the guarantor to step in if the primary borrower defaults. It includes comprehensive details about the guaranteed amount, the scope of the guarantor's liability, enforcement mechanisms, and the bank's rights. The document must comply with RBI guidelines, the Indian Contract Act, and other relevant banking regulations. It's particularly important in corporate and business lending scenarios where personal guarantees from directors or promoters are often required to secure institutional funding.

1. Parties: Identifies the guarantor, the bank (beneficiary), and the borrower whose obligations are being guaranteed

2. Background: Explains the context of the guarantee, including details of the primary loan agreement and the relationship between the guarantor and the borrower

3. Definitions: Defines key terms used throughout the guarantee agreement

4. Scope of Guarantee: Describes the extent of the guarantor's liability and the obligations being guaranteed

5. Nature of Guarantee: Specifies that this is a continuing guarantee and defines its unconditional and irrevocable nature

6. Guarantor's Representations and Warranties: Statements about the guarantor's legal capacity, financial condition, and authority to provide the guarantee

7. Guarantor's Covenants: Ongoing obligations of the guarantor including information provision and maintenance of financial condition

8. Bank's Rights and Remedies: Details the bank's rights in case of default and methods of enforcement

9. Demand and Payment: Procedures for the bank to make a demand under the guarantee and payment obligations

10. Indemnity: Guarantor's obligation to indemnify the bank against losses

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

12. Notices: Communication procedures between parties

13. Execution: Signature blocks and execution formalities