Section 4(3) in The Foreign Exchange Management (Guarantees) Regulations, 2000
(3)An authorised dealer may, in the ordinary course of his business, give a guarantee in the following other cases, namely:--(i)on behalf of his customer or branch or correspondent outside India in respect of missing or defective documents, or authenticity of signatures;(ii)in favour of organizations outside India issuing travellers cheques stocked for sale in India by the authorised dealer or by his constituents who are authorised persons;(iii)[ in favour of foreign airlines/International Air Transport Association (IATA) on behalf of IATA approved travel agents;] [ Inserted by G.S.R. 745(E), dated 16.10.2004 (w.e.f. 16.10.2004).](iv)[ in favour of a non-resident service provider, on behalf of a resident customer who is a service importer, subject to such terms and conditions as stipulated by the Reserve Bank from time to time. [Substituted by Notification No. G.S.R. 481(E) dated 15.2.2013 (w.e.f. 5.5.2000)]Provided that no guarantee for an amount exceeding USD 500,000 or its equivalent shall be issued on behalf of a service importer other than a Public Sector Company or a Department / Undertaking of the Government of India / State Government.Provided further that where the service importer is a PubliC Sector Company or a Department 1 Undertaking of the Government of India / State Government, no guarantee for an amount exceeding USD 100,000 or its equivalent shall be issued without the prior approval of the Ministry of Finance, Government of India.Explanation : For the purpose of this regulation, "Public Sector Company" means a Government company as defined in Section 617 of the Companies Act, 1956.]
