Resident Indians may act as surety or principal debtor subject to transaction legality and mutual borrowing-eligibility conditions.

Permission to act as a surety or a principal debtor is granted to persons resident in India only where the underlying transaction is not prohibited under the Act and where the surety and principal debtor are eligible to lend to and borrow from each other under the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018, subject to exceptions for authorised dealer bank guarantees with counter-guarantee or full collateral, agents of foreign carriers for statutory liabilities, and resident-to-resident guarantees.

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