Guarantee definitions clarify counter-guarantees, default-triggered liability, and the roles of creditor, principal debtor, and surety under foreign exchange rules.

Guarantee, including a counter-guarantee, covers any contract under which a promise is performed or a debt, obligation or other liability is discharged upon default by the principal debtor, including a portfolio of such liabilities. A creditor receives the guarantee, a principal debtor is the person whose default triggers it, and a surety gives it. Authorised dealer and IFSC carry their specified statutory meanings, while undefined terms take their meanings from the Act and subordinate rules or regulations.

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