Bank guarantee secures export/import authorisation compliance, payable on demand to government without dispute for breaches.

Appendix-2N sets a standard, unconditional on-demand bank guarantee securing compliance with authorisations under the Foreign Trade Policy: the Bank irrevocably undertakes to pay the Government up to the guaranteed amount on demand for loss or damage from breach of authorisation terms, remains liable notwithstanding disputes or extensions granted to the exporter/importer, and must keep the guarantee alive for prescribed minimum periods or renew automatically until departmental cancellation, with invocation allowed only by the beneficiary.

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