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The Cash Backed Bank Guarantee is a crucial financial instrument in South African commercial practice, typically used when parties require a secure form of financial assurance backed by actual cash deposits. This document is employed in various scenarios including tender securities, performance guarantees, advance payment guarantees, and rental deposits. The guarantee is structured under South African law and banking regulations, providing the beneficiary with the security of a bank's promise to pay, while the bank's risk is fully covered by the applicant's cash deposit. It includes specific provisions for the maintenance of the cash security, conditions for demands, and release mechanisms, ensuring compliance with South African banking and financial sector regulations while protecting all parties' interests.

1. Parties: Identifies all parties to the guarantee: the Bank (Guarantor), the Applicant (who provides the cash backing), and the Beneficiary

2. Background: Sets out the context of the guarantee, including reference to the underlying transaction or obligation being guaranteed

3. Definitions: Defines key terms used throughout the guarantee document

4. Amount of Guarantee: Specifies the maximum guaranteed amount and currency

5. Cash Deposit Details: Details of the cash backing, including account information and confirmation of funds

6. Duration and Expiry: Specifies the effective date, duration, and expiry conditions of the guarantee

7. Bank's Obligations: Details the bank's commitments and conditions under which the guarantee will be honored

8. Demand Requirements: Specifies the process and requirements for making a valid demand under the guarantee

9. Payment Terms: Sets out how and when payment will be made following a valid demand

10. Reduction and Release: Conditions under which the guarantee amount may be reduced or the guarantee released

11. Governing Law and Jurisdiction: Specifies South African law as governing law and determines jurisdiction for disputes