• Trade guarantees are facilities to guarantee the payment for the purchase of goods and services

• All residents are freely allowed to obtain trade guarantees in foreign currency from domestic banks where the tenure of the guarantee does not exceed 12 months

• In addition, non-resident controlled companies (NRCCs) operating in Malaysia, which obtain such trade guarantees (in ringgit or foreign currency) are required to comply with the 60:40 requirement.

• The trade guarantees obtained from offshore sources would be included in the computation of the resident's total foreign currency borrowing.
• These trade guarantees obtained from offshore sources, including Labuan Offshore Financial Centre, must be denominated in foreign currency
• Prior approval from the Controller would be required if the resident's total foreign currency borrowing exceed the aggregate of RM5 million equivalent.

• Performance bonds, tender bonds, guarantee for the supply of goods / services, shipping guarantees, etc.

• Residents are freely allowed to issue non-financial guarantees in favour of non-residents or on behalf of nonresidents
• Residents are also freely allowed to obtain non-financial guarantees from offshore sources.
• These non-financial guarantees must be denominated in foreign currency.
• All payments between the resident and the nonresident must be made in foreign currency

• Financial guarantees are guarantees to secure the repayment of an advance, a loan or similar credit facility

• All financial guarantees above the equivalent of RM5.0 million issued by residents (whether banks, corporates or individuals) in favour of nonresidents, are required to be registered with Bank Negara Malaysia (BNM) upon issuance
• Guarantors should submit the following information on the guarantee to BNM:

• Name of issuer
• Name of party on whose behalf the guarantee is issued
• Amount guaranteed
• >Beneficiary (name and address)
• Purpose of guarantee

• The guarantees must be denominated in foreign currency
• Payment under the guarantee can be freely made upon:-

• acknowledgment of receipt of the above information by BNM
• informing BNM when the guarantee is called upon

• All payments under the guarantee between the resident and nonresident party must be made in foreign currency

• All financial guarantees issued by residents above the equivalent of RM5.0 million (whether banks, corporates or individuals) on behalf of nonresidents, are required to be registered with Bank Negara Malaysia (BNM) upon issuance
• Guarantors should submit the following information on the guarantee to BNM:

• Name of issuer
• Name of party (name and address) on whose behalf the guarantee is issued
• Amount guaranteed
• Beneficiary (name and address)
• Purpose of guarantee

• The guarantees must be denominated in foreign currency
• Payment under the guarantee can be freely made upon:-

• acknowledgment of the receipt of the above information by BNM, and
• informing BNM when the guarantee is called upon

• All payments under the guarantee between the resident and nonresident party must be made in foreign currency
• Consequential receivable from the guarantees being called upon would have to be reported to BNM.

• Residents are allowed to obtain financial guarantees from Licensed Offshore Banks or nonresident individuals, nonresident shareholders, associate or related companies and which are not financial institutions.
• The following information should be submitted to BNM:

• Name of issuer
• Name of party on whose behalf the guarantee is issued
• Amount guaranteed
• Beneficiary (name and address)
• Purpose of guarantee

• The financial guarantees obtained from all the parties stated above must be denominated in foreign currency;
• Payment under the guarantee can be freely made upon:-

• acknowledgment of the receipt of the above information by BNM, and
• informing BNM when the guarantee is called upon

• All payments when the guarantee is called upon must be in foreign currency

• Consequential debts arising from the payment under the guarantee being called upon would have to be reported to BNM and would be included in the computation of the resident's total foreign currency borrowing.

• Residents are allowed to obtain financial guarantees in aggregate up to the equivalent of RM5 million from nonresident financial institutions
• The following information on the guarantee should be submitted to BNM:

• Name of issuer
• Name of party on whose behalf the guarantee is issued
• Amount guaranteed
• Beneficiary (name and address)
• Purpose of the guarantee

• The guarantees must be denominated in foreign currency

• Payment under the guarantee can be freely made upon:-

• acknowledgment of receipt of the above information by BNM; and
• informing BNM when the guarantee is called upon.

• Prior approval from the Controller would be required if the resident's total foreign currency borrowing, including financial guarantees obtained from nonresident financial institutions, exceed the aggregate of RM5 million equivalent.