The Letter for Overdraft Facility is a crucial banking document used in the United Arab Emirates when a bank agrees to provide overdraft facilities to its customers. This document is essential for both corporate and individual banking relationships, providing flexibility in managing cash flow and short-term financing needs. The letter outlines the terms under which the bank will allow the customer to overdraw their account, including the approved limit, interest rates, and associated fees. Governed by UAE Federal Law No. 14 of 2018 and various Central Bank regulations, the Letter for Overdraft Facility must comply with both conventional and Islamic banking requirements where applicable. It serves as a formal communication of the facility's approval and terms, while also meeting regulatory requirements for documentation and disclosure in the UAE banking sector.
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1. Bank Details and Reference: Bank's letterhead, reference number, and date
2. Customer Details: Full name and address of the customer/borrower
3. Account Reference: Details of the account(s) to which the overdraft facility relates
4. Facility Amount: Clear statement of the approved overdraft limit
5. Interest Rate and Charges: Detailed breakdown of applicable interest rates, fees, and charges
6. Term and Review: Duration of the facility and review terms
7. Key Terms and Conditions: Essential conditions governing the use of the facility
8. Regulatory Disclosures: Mandatory disclosures as per UAE Central Bank requirements
9. Acceptance: Space for customer acknowledgment and acceptance
1. Security Details: Required when the overdraft facility is secured against assets or requires guarantees
2. Special Conditions: Any special terms or conditions specific to the customer's circumstances
3. Purpose Declaration: Required when the facility is granted for specific business purposes
4. Islamic Banking Provisions: Required when the facility is Sharia-compliant
5. Foreign Currency Provisions: Required when the overdraft facility involves foreign currency
1. Schedule of Charges: Detailed breakdown of all applicable fees, charges, and commission rates
2. Terms and Conditions: Complete standard terms and conditions document referenced in the letter
3. Security Documentation: Forms and documents related to any security or guarantee requirements
4. Regulatory Disclosure Statement: Detailed regulatory disclosures as required by UAE Central Bank
5. Direct Debit Authorization: Form for setting up automatic payments if required
Relevant legal definitions
Account
Authorized Limit
Available Balance
Bank
Banking Day
Base Rate
Borrower
Business Day
Charges
Customer
Default Event
Facility
Facility Currency
Facility Period
Financial Indebtedness
Guarantee
Interest Period
Interest Rate
Legal Requirements
Overdraft
Overdraft Limit
Outstanding Balance
Profit Rate
Reference Rate
Regulatory Authority
Review Date
Security
Term
UAE
UAE Dirham
Unauthorized Overdraft
Variable Rate
Working Day
Authorized Limit
Available Balance
Bank
Banking Day
Base Rate
Borrower
Business Day
Charges
Customer
Default Event
Facility
Facility Currency
Facility Period
Financial Indebtedness
Guarantee
Interest Period
Interest Rate
Legal Requirements
Overdraft
Overdraft Limit
Outstanding Balance
Profit Rate
Reference Rate
Regulatory Authority
Review Date
Security
Term
UAE
UAE Dirham
Unauthorized Overdraft
Variable Rate
Working Day
Clauses
Facility Terms
Interest and Charges
Repayment
Security
Representations and Warranties
Customer Undertakings
Events of Default
Bank's Rights
Set-off
Assignment
Force Majeure
Notices
Governing Law
Jurisdiction
Amendment
Termination
Default Interest
Account Operation
Review and Renewal
Regulatory Compliance
Islamic Banking Provisions
Anti-Money Laundering
Confidentiality
Data Protection
Currency Provisions
Interest and Charges
Repayment
Security
Representations and Warranties
Customer Undertakings
Events of Default
Bank's Rights
Set-off
Assignment
Force Majeure
Notices
Governing Law
Jurisdiction
Amendment
Termination
Default Interest
Account Operation
Review and Renewal
Regulatory Compliance
Islamic Banking Provisions
Anti-Money Laundering
Confidentiality
Data Protection
Currency Provisions
Relevant Industries
Banking and Financial Services
Retail Banking
Corporate Banking
Islamic Banking
Small and Medium Enterprises
Commercial Real Estate
Trading and Commerce
Manufacturing
Professional Services
Hospitality and Tourism
Relevant Teams
Legal
Compliance
Credit Risk
Corporate Banking
Retail Banking
Operations
Treasury
Islamic Banking
Documentation
Customer Service
Risk Management
Account Management
Relevant Roles
Relationship Manager
Credit Officer
Branch Manager
Corporate Banking Officer
Risk Manager
Compliance Officer
Legal Counsel
Account Manager
Treasury Manager
Financial Controller
Chief Financial Officer
Banking Operations Manager
Credit Risk Analyst
Islamic Banking Officer
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