THE LEGAL PERSPECTIVE ON STRENGTHENING THE PRACTICE OF BANK GUARANTEES IN INDONESIA: REVISITING THE PROVISIONS RELATED TO PAYMENT
This Article provides the legal perspective of the transaction of bank guarantees in the banking practice in Indonesia. It examines the provisions related to payment for bank guarantees by comparing the provisions related to payment for the bank garansi and that of the standby letter of credit or de...
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| Format: | Article |
| Language: | English |
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Bank Indonesia
2022-05-01
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| Series: | Journal of Central Banking Law and Institutions |
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| Online Access: | https://jcli-bi.org/index.php/jcli/article/view/16 |
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| author | Ramlan Ginting |
| author_facet | Ramlan Ginting |
| author_sort | Ramlan Ginting |
| collection | DOAJ |
| description | This Article provides the legal perspective of the transaction of bank guarantees in the banking practice in Indonesia. It examines the provisions related to payment for bank guarantees by comparing the provisions related to payment for the bank garansi and that of the standby letter of credit or demand guarantee. The work shows that the bank garansi is dependent guaranty, whereas the standby letter of credit or demand guarantee is independent guaranty. The payment for the bank garansi is based on the actual default, whereas the payment for the standby letter of credit or demand guarantee is based on the statement of default. The primary obligation to pay for the bank garansi is that of the issuing bank or guaranteed party, while the primary obligation to pay for the standby letter of credit or demand guarantee is that of the issuing bank. And, as to the international counter guarantee, the conflicting provisions arise when it is asking the bank garansi as the domestic bank guarantee. The banks, companies and government agencies involved in the transaction of bank guarantees are encouraged to understand the implication of these findings and further prepare the appropriate solution. |
| format | Article |
| id | doaj-art-36626194eefd41c6b296e84aa857ff91 |
| institution | DOAJ |
| issn | 2827-7775 2809-9885 |
| language | English |
| publishDate | 2022-05-01 |
| publisher | Bank Indonesia |
| record_format | Article |
| series | Journal of Central Banking Law and Institutions |
| spelling | doaj-art-36626194eefd41c6b296e84aa857ff912025-08-20T03:11:18ZengBank IndonesiaJournal of Central Banking Law and Institutions2827-77752809-98852022-05-011221523610.21098/jcli.v1i2.1616THE LEGAL PERSPECTIVE ON STRENGTHENING THE PRACTICE OF BANK GUARANTEES IN INDONESIA: REVISITING THE PROVISIONS RELATED TO PAYMENTRamlan Ginting0Universitas IndonesiaThis Article provides the legal perspective of the transaction of bank guarantees in the banking practice in Indonesia. It examines the provisions related to payment for bank guarantees by comparing the provisions related to payment for the bank garansi and that of the standby letter of credit or demand guarantee. The work shows that the bank garansi is dependent guaranty, whereas the standby letter of credit or demand guarantee is independent guaranty. The payment for the bank garansi is based on the actual default, whereas the payment for the standby letter of credit or demand guarantee is based on the statement of default. The primary obligation to pay for the bank garansi is that of the issuing bank or guaranteed party, while the primary obligation to pay for the standby letter of credit or demand guarantee is that of the issuing bank. And, as to the international counter guarantee, the conflicting provisions arise when it is asking the bank garansi as the domestic bank guarantee. The banks, companies and government agencies involved in the transaction of bank guarantees are encouraged to understand the implication of these findings and further prepare the appropriate solution.https://jcli-bi.org/index.php/jcli/article/view/16demand guaranteecounter guaranteeinternational rulesbank garansistandby letter of credit |
| spellingShingle | Ramlan Ginting THE LEGAL PERSPECTIVE ON STRENGTHENING THE PRACTICE OF BANK GUARANTEES IN INDONESIA: REVISITING THE PROVISIONS RELATED TO PAYMENT Journal of Central Banking Law and Institutions demand guarantee counter guarantee international rules bank garansi standby letter of credit |
| title | THE LEGAL PERSPECTIVE ON STRENGTHENING THE PRACTICE OF BANK GUARANTEES IN INDONESIA: REVISITING THE PROVISIONS RELATED TO PAYMENT |
| title_full | THE LEGAL PERSPECTIVE ON STRENGTHENING THE PRACTICE OF BANK GUARANTEES IN INDONESIA: REVISITING THE PROVISIONS RELATED TO PAYMENT |
| title_fullStr | THE LEGAL PERSPECTIVE ON STRENGTHENING THE PRACTICE OF BANK GUARANTEES IN INDONESIA: REVISITING THE PROVISIONS RELATED TO PAYMENT |
| title_full_unstemmed | THE LEGAL PERSPECTIVE ON STRENGTHENING THE PRACTICE OF BANK GUARANTEES IN INDONESIA: REVISITING THE PROVISIONS RELATED TO PAYMENT |
| title_short | THE LEGAL PERSPECTIVE ON STRENGTHENING THE PRACTICE OF BANK GUARANTEES IN INDONESIA: REVISITING THE PROVISIONS RELATED TO PAYMENT |
| title_sort | legal perspective on strengthening the practice of bank guarantees in indonesia revisiting the provisions related to payment |
| topic | demand guarantee counter guarantee international rules bank garansi standby letter of credit |
| url | https://jcli-bi.org/index.php/jcli/article/view/16 |
| work_keys_str_mv | AT ramlanginting thelegalperspectiveonstrengtheningthepracticeofbankguaranteesinindonesiarevisitingtheprovisionsrelatedtopayment AT ramlanginting legalperspectiveonstrengtheningthepracticeofbankguaranteesinindonesiarevisitingtheprovisionsrelatedtopayment |