In this era where commerce is very developed, the role of banking is the center of finance system in all economic sectors, it's because of its function where it served financing sector and make sure that every mechanism of payment for all business transaction has done well. Business transaction using guarantee bank as a collateral of payment to a guarantee (personal or company), is more likeable these days. Other than bank guarantee we also known Standby Letter of Credit which is a common use in international transaction. In Indonesian banking, we found many problems concerning the matters, such as, the issued bank is not play by the government rules or Bank Indonesia's rules, so each of them have different kind of bank guarantee. They don't go by civil law either, which is the basic law to rules anything concerning debt. Basically collateral as bank guarantee is an agreement where bank is a guarantor to his client. Basic law for disengaging every privileges should be well announced in issuing bank guarantee, so both parties (issuer & benefactor) are well inform of the discrepancies. Law concerning Standby Letter of Credit is UCP 500 or ISP 98 as an international law, they are using it world wide when they engage in standby letter of credit transaction. It's not that easy in reality, so much trouble can't be solved by that laws. In order to surpass that law, we strongly believe that we should have much more powerful law to anticipate the progress of the development in banking, particularly in bank guarantee because Bank Indonesia's rules about bank guarantee is obsolete and need to be adjusted because like it or not Bank Indonesia's rules are the main rules in banking. This paper is about how Bank Indonesia's rules of bank guarantee is being used in banking