Document background
The Bank Counter Guarantee is a specialized financial instrument used in Malaysia when one bank needs to provide security to another bank in relation to an existing bank guarantee. This document becomes necessary in various scenarios, particularly in international trade, large infrastructure projects, or when local banks need to support their customers' overseas activities. The Bank Counter Guarantee details the specific obligations, including the guarantee amount, validity period, and conditions for demand, while ensuring compliance with Malaysian banking regulations and financial services laws. It serves as a risk mitigation tool for banks and provides a clear framework for inter-bank obligations and responsibilities. The document must comply with both the Financial Services Act 2013 and the Contracts Act 1950, and where applicable, the Islamic Financial Services Act 2013 for Shariah-compliant arrangements.
