The Ministry of Coal has introduced a key reform to provide greater financial flexibility to coal block allocates and further strengthen ease of doing business in the coal sector.
Through the Coal Blocks Allocation (Amendment) Rules, 2026, the Ministry has enabled the use of Insurance Surety Bonds (ISBs) in place of Performance Bank Guarantees (PBGs) for coal blocks allocated under the Mines and Minerals (Development and Regulation) Act, 1957.
The amended framework allows coal block allocates to choose between a Performance Bank Guarantee and an Insurance Surety Bond for fulfilling their performance security obligations.
It also extends this flexibility to existing allocates, enabling them to replace Performance Bank Guarantees already furnished with Insurance Surety Bonds, in accordance with the prescribed conditions.
The measure is expected to ease the financial burden associated with conventional bank guarantee arrangements and enable coal block allocates to deploy their capital more efficiently for mine development and operational activities.