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Indians can guarantee overseas projects without RBI nod

The Reserve Bank of India has allowed individual Indian residents to offer guarantee in lieu of bid bond guarantee for overseas project contract bidding without its approval provided the amount of such guarantee does not exceed five per cent of the contract value.

RBI said in a circular on Tuesday that an individual resident being an exporter company may give guarantee for bidding for a contract outside India without the approval of the authorities within the limit of 5 per cent of the contract value.

However, exporters have to ensure that provisions contained in the memorandum and other instructions issued by the RBI from time to time for submission of bids, are complied with.

This permission was given following the recent amendment of the Foreign Exchange Management (Guarantee) Regulations, 2000.

UNI

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