Document background
The Loan Modification Agreement is a crucial document used when parties need to alter the terms of an existing loan arrangement under Indonesian law. This document becomes necessary during various circumstances, such as when a borrower requires payment restructuring, interest rate adjustments, or term extensions. It's particularly relevant in the context of Indonesian banking regulations, where loan modifications must comply with OJK guidelines and Bank Indonesia regulations. The agreement carefully preserves the original loan's validity while incorporating approved changes, ensuring all modifications are properly documented and legally binding. This document type has gained increased importance following regulatory changes that provide greater flexibility for loan restructuring, especially in response to economic challenges. The agreement must be carefully drafted to comply with Indonesian Civil Code requirements for contract modifications and specific banking sector regulations regarding loan quality assessment and restructuring procedures.
