Coal Ministry permits use of insurance surety bonds as replacement for bank guarantees
The Coal Ministry has permitted coal block allottees to use Insurance Surety Bonds (ISBs) as a replacement for Performance Bank Guarantees (PBGs) to fulfill their performance surety obligations. This measure aims to alleviate the financial burden on allottees, allowing for more efficient capital deployment in mine development and operations, while ensuring government interests remain protected. The directive also applies retrospectively to existing allottees.
The Coal Ministry has permitted coal block allottees to use Insurance Surety Bonds (ISBs) as a replacement for Performance Bank Guarantees (PBGs) to fulfill their performance surety obligations. This measure aims to alleviate the financial burden on allottees, allowing for more efficient capital deployment in mine development and operations, while ensuring government interests remain protected. The directive also applies retrospectively to existing allottees.
Exam linkage
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Specifically, financial markets and instruments, and government policies affecting industries.