The Bilateral Loan Agreement serves as a fundamental legal instrument in Indian financial transactions, establishing a formal lending relationship between two parties. This document is essential when any entity (whether corporate or individual) seeks to borrow funds from a financial institution or another entity under Indian jurisdiction. The agreement comprehensively covers loan terms, security arrangements, repayment schedules, and default provisions, ensuring compliance with Indian banking regulations, the Indian Contract Act, and other relevant financial legislation. It's particularly crucial for protecting both lender and borrower interests by clearly documenting all aspects of the loan transaction, from disbursement to repayment, while incorporating necessary legal safeguards and enforcement mechanisms recognized under Indian law.

1. Parties: Identifies and defines the Lender and Borrower with their full legal names, addresses, and company registration details

2. Background: Recitals explaining the context of the loan and the parties' intention to enter into the agreement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and sets out rules of interpretation

4. The Facility: Details of the loan amount, purpose, and drawdown mechanisms

5. Interest: Interest rate, calculation method, payment periods, and default interest provisions

6. Repayment: Repayment schedule, prepayment terms, and payment mechanics

7. Conditions Precedent: Conditions that must be satisfied before the loan can be drawn

8. Representations and Warranties: Statements of fact and assurances given by the Borrower

9. Covenants: Positive and negative obligations of the Borrower during the loan term

10. Events of Default: Circumstances that would allow the Lender to demand immediate repayment

11. Remedies: Lender's rights and actions available upon occurrence of an Event of Default

12. Costs and Expenses: Allocation of transaction costs and ongoing expenses

13. Notices: Communication methods and contact details for formal notices

14. Assignment and Transfer: Rights and restrictions regarding transfer of rights under the agreement

15. Governing Law and Jurisdiction: Specifies Indian law as governing law and jurisdiction for disputes

16. Execution: Signature blocks and execution formalities