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The Mobilisation Advance Bank Guarantee is essential in large-scale projects where substantial initial funding is required to commence work. Under Indian law, this document is commonly used when a project owner provides advance payment to a contractor for mobilizing resources, purchasing equipment, or setting up site facilities. The guarantee ensures that the advance payment is properly utilized and provides security for its recovery. The document typically specifies the guaranteed amount (usually equivalent to the advance payment), validity period, reduction mechanism aligned with work progress, and conditions for invocation. It must comply with Reserve Bank of India guidelines and the Indian Contract Act, 1872. This type of guarantee is particularly important in protecting the project owner's interests while facilitating project initialization and cash flow management for contractors.
