Rule 26 — RPR

26. Government guarantees.– (1) A Government guarantee is an arrangement in which a Government entity undertakes payment of a debt or performance of an obligation in the event of a default by the primary creditor.

(2) The power of the Government to give guarantee emanates from and is subject to such limits as may be fixed in terms of article 292 of the Constitution, the Fiscal Responsibility and Budget Management Act, 2003 (39 of 2003) and the rules framed thereunder.

(3) The Ministries or departments shall levy guarantee fee on the amount outstanding at the beginning of guarantee year as per the rate notified by the Budget Division and take necessary steps to ensure prompt recovery of the prescribed fee.