Document background
The Cash Backed Bank Guarantee is a crucial financial instrument used in Malaysian business transactions where a party requires security for performance or payment obligations. This document is typically used in scenarios such as construction projects, tender submissions, or commercial contracts where the beneficiary needs assurance of payment or performance. The guarantee is distinguished by being fully secured by a cash deposit from the applicant, which provides the bank with immediate recourse in case of a demand. The document must comply with Malaysian banking regulations, particularly the Financial Services Act 2013 and Bank Negara Malaysia guidelines, while also adhering to Malaysian contract law principles. It includes detailed provisions on the maintenance of the cash deposit, demand mechanisms, and the specific conditions under which the guarantee can be called upon.
