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The Revolving Bank Guarantee is a specialized financial instrument commonly used in Pakistani business transactions where ongoing security is required for recurring obligations. It is particularly valuable in situations requiring continuous financial assurance, such as construction projects, supply contracts, or recurring business transactions. The document provides a renewable guarantee mechanism where the guarantee amount automatically reinstates after each claim, up to a predetermined maximum amount. This type of guarantee, governed by Pakistani law and regulated by the State Bank of Pakistan, offers more flexibility than standard bank guarantees as it eliminates the need for issuing multiple separate guarantees. The document must comply with the Banking Companies Ordinance 1962, Contract Act 1872, and relevant Prudential Regulations, making it essential to include specific provisions for the revolving mechanism, claim procedures, and regulatory compliance.

1. Parties: Identification of the Bank (Guarantor), the Applicant (Principal), and the Beneficiary

2. Background: Context of the guarantee, underlying business relationship, and purpose of the revolving guarantee

3. Definitions: Key terms including Guarantee Amount, Validity Period, Reinstatement Terms, and other technical terms

4. Guarantee Amount and Scope: Maximum guarantee amount, revolving mechanism, and scope of the bank's undertaking

5. Duration and Renewal: Initial validity period, automatic renewal conditions, and final expiry terms

6. Revolving Mechanism: Specific terms governing how the guarantee amount reinstates after each claim

7. Claims Procedure: Process for making claims, required documentation, and timeline for settlement

8. Bank's Rights and Obligations: Extent of bank's liability, examination rights, and payment obligations

9. Applicant's Obligations: Responsibilities including fees, counter-indemnity, and maintaining security

10. Governing Law and Jurisdiction: Application of Pakistani law and jurisdiction for disputes

11. Notices: Communication methods and addresses for all parties

12. Fees and Charges: Bank guarantee commission, processing fees, and payment terms