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Issue of Corporate Guarantee in lieu of Bid Bond Guarantee - FEMA - 041Extract Issue of Corporate Guarantee in lieu of Bid Bond Guarantee RESERVE BANK OF INDIA EXCHANGE CONTROL DEPARTMENT CENTRAL OFFICE MUMBAI A.P.(DIR Series) Circular No.41 November 8, 2002 To All Authorised Dealers in Foreign Exchange Madam/Sirs, Issue of Corporate Guarantee in lieu of Bid Bond Guarantee Attention of authorised dealers is invited to Regulation 5 of the Notification No.FEMA.8/2000-RB dated May 3, 2000 in terms of which a person other than authorised dealer is permitted to give a guarantee in certain types of cases. 2. Reserve Bank has issued Notification No.FEMA.56/2002-RB dated March 18, 2002 (copy enclosed) amending its Notification referred to above, allowing exporters, desiring to submit bids for execution of projects abroad including service contract to issue Corporate Guarantee in lieu of Bid Bond Guarantee subject to the condition that the amount of such guarantee shall not exceed 5% of the contract value. Exporters, however, have to ensure that provisions contained in Memorandum PEM and other instructions issued by Reserve Bank from time to time for submission of bids are complied with. 3. Authorised Dealers may bring the contents of the circular to the notice of their constituents concerned. 4. Necessary amendments may be carried out in Notification No.FEMA.8/2000-RB dated May 3, 2000 as indicated in Notification No.FEMA.56/2002-RB dated March 18, 2002. 5. The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999). Yours faithfully, Grace Koshie Chief General Manager
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