Standby Credit Agreement Template for Indonesia

The Standby Credit Agreement serves as a crucial financial instrument in Indonesian business transactions, providing a contingent payment mechanism that can be drawn upon under specified conditions. This document is typically used when a party requires a bank's backing to guarantee financial obligations, performance of contracts, or other commercial commitments. The agreement must comply with Indonesian banking regulations, including Bank Indonesia regulations and OJK requirements, while also considering international banking practices where relevant. It includes detailed provisions on facility terms, drawing conditions, compliance requirements, and enforcement mechanisms. The document is particularly important in international trade, project finance, and corporate banking transactions where Indonesian entities require robust financial backing or where international parties seek security for transactions with Indonesian counterparts.

1. Parties: Identification of the credit provider (bank/financial institution) and the beneficiary, including their complete legal names, registration numbers, and addresses

2. Background: Context of the standby credit arrangement, purpose of the facility, and relationship between the parties

3. Definitions: Definitions of key terms used throughout the agreement, including banking and financial terms specific to standby credits

4. Facility Terms: Details of the standby credit facility, including amount, currency, purpose, and validity period

5. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

6. Utilization: Procedures and requirements for drawing under the standby credit

7. Fees and Expenses: All applicable fees, charges, and expenses related to the facility

8. Representations and Warranties: Standard and specific representations and warranties from the parties

9. Covenants: Positive and negative undertakings by the parties

10. Events of Default: Circumstances constituting default and consequences thereof

11. Payments: Payment terms, mechanisms, and currency provisions

12. Changes to Parties: Rules regarding assignment, transfer, and novation

13. Notices: Communication procedures between parties

14. Governing Law and Jurisdiction: Confirmation of Indonesian law as governing law and jurisdiction provisions

15. Execution: Signature blocks and execution requirements under Indonesian law