Bank Assurance Letter Template for Malaysia

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Key Requirements PROMPT example:

Bank Assurance Letter

"I need a Bank Assurance Letter for a construction project in Kuala Lumpur, where my company requires RM 5 million assurance from HSBC Malaysia to secure a government infrastructure contract, with the letter valid from January 1, 2025, to December 31, 2025."

Document background
The Bank Assurance Letter is a crucial financial instrument in Malaysian business transactions, issued by licensed banks under the supervision of Bank Negara Malaysia. This document type emerged from the need to provide secure financial guarantees in commercial transactions, particularly in sectors requiring significant financial assurance such as construction, international trade, and government contracts. A Bank Assurance Letter typically contains the bank's unconditional promise to pay or fulfill specific obligations upon the principal's default, subject to specified terms and conditions. The document must comply with both the Financial Services Act 2013 and, where applicable, the Islamic Financial Services Act 2013, reflecting Malaysia's comprehensive financial regulatory framework. It serves as a risk management tool for businesses while providing beneficiaries with the security of having a bank's assurance backing a transaction.
Suggested Sections

1. Bank's Details and Reference: Full name and address of the issuing bank, letter reference number, and date

2. Addressee Details: Full name and address of the beneficiary of the assurance letter

3. Subject Line: Clear identification of the assurance being provided and reference to the underlying transaction or requirement

4. Principal Identification: Details of the party for whom the assurance is being provided

5. Assurance Statement: Clear and unambiguous statement of the bank's assurance or guarantee, including the specific amount if applicable

6. Terms and Conditions: Key conditions under which the assurance is valid and any limitations

7. Validity Period: Clear statement of the duration of the assurance, including start and end dates

8. Governing Law Statement: Explicit reference to Malaysian law as the governing law

9. Authorized Signatories: Space for authorized bank officials' signatures and bank seal

Optional Sections

1. Islamic Banking Compliance Statement: Required when the assurance letter is issued under Islamic banking principles, confirming Shariah compliance

2. Counter-Guarantee Reference: Include when the assurance is backed by a counter-guarantee from another financial institution

3. Currency Exchange Provisions: Required when the assurance involves foreign currency transactions

4. Step-in Rights: Optional section detailing the bank's rights to step in or take certain actions in specific circumstances

5. Claim Procedures: Detailed procedures for making claims against the assurance, if applicable to the specific type of assurance

6. Force Majeure Clause: Optional section addressing circumstances beyond control that might affect the assurance

Suggested Schedules

1. Schedule A - Transaction Details: Details of the underlying transaction or project for which the assurance is provided

2. Schedule B - Supporting Documents: List of documents provided to the bank in support of the assurance

3. Appendix 1 - Claim Forms: Standard forms and formats for making claims under the assurance

4. Appendix 2 - Authority Documents: Copies of relevant board resolutions or powers of attorney authorizing the assurance

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant Industries

Banking and Financial Services

Construction and Infrastructure

International Trade

Real Estate Development

Manufacturing

Energy and Utilities

Telecommunications

Government and Public Sector

Retail and Commerce

Transportation and Logistics

Islamic Banking

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Procurement

Commercial Operations

Credit Control

Islamic Banking

Trade Finance

Project Management

Corporate Secretariat

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Bank Relationship Manager

Commercial Director

Contract Manager

Legal Counsel

Risk Manager

Credit Manager

Procurement Manager

Project Finance Manager

Company Secretary

Trade Finance Manager

Compliance Officer

Islamic Banking Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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