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Bank Assurance Letters are crucial financial instruments in Singapore's banking sector, commonly used when a party requires formal guarantee of financial capacity or commitment. These letters, governed by Singapore's Banking Act and MAS regulations, provide third-party beneficiaries with the security of a bank's promise to honor specific financial obligations. A Bank Assurance Letter typically includes the assured amount, validity period, conditions for calling upon the assurance, and the bank's unconditional commitment to honor the obligation. They are particularly valuable in commercial transactions, tender submissions, and project guarantees where financial security is paramount.
