Authorised dealers may allow remittances towards membership subscription of Overseas Protection and Indemnity Clubs ( P & I Clubs), on behalf of shipping companies who are their constituents, on production by the shipping company concerned the approval granted by Government of India under the General Insurance Business (Nationalisation) Act, 1972.

(ii)Where Indian ships are involved in collision with foreign ships, P & I Clubs provide guarantee for payments towards claims made by the foreign shipowners. GIC and its subsidiaries have been permitted to provide counter-guarantee to P & I Clubs in respect of 3/4th collision liability to be borne by them as insurers. Similarly, whenever any Indian ship gets involved in a casualty in the mid-sea or is grounded, the services of independent salvers are required to be engaged. GIC and its subsidiaries have been permitted to provide 100% counter-guarantee to overseas claims settling agents/brokers/ bankers in respect of salvage security provided by them without any limit. Authorised dealers may, therefore, issue the necessary guarantees/counter-guarantees on behalf of GIC and its subsidiaries and also make remittances thereagainst on the basis of claims made by the overseas parties, under intimation to Reserve Bank. A copy of the claim and other relevant documents should be enclosed with such reports.