Collateral Release Letter for India

Collateral Release Letter Template for India

A Collateral Release Letter is a formal document used in Indian jurisdiction to discharge security interests over assets that were previously pledged as collateral for a loan or other financial obligation. The document serves as official confirmation that the secured party/lender releases its claims over specific collateral, whether due to full repayment of the secured obligations, restructuring of security arrangements, or other agreed circumstances. Under Indian law, this document must comply with various statutes including the Transfer of Property Act, 1882, and the Registration Act, 1908, particularly when dealing with immovable property.

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What is a Collateral Release Letter?

The Collateral Release Letter is an essential document in secured financing transactions under Indian law, used when a lender needs to formally relinquish its security interest over assets that were previously pledged as collateral. This document becomes necessary when secured obligations have been fully satisfied, when there's a partial release of security following partial repayment, or during refinancing transactions. The letter must comply with Indian legal requirements, including those under the Transfer of Property Act, SARFAESI Act, and relevant state stamp duties. It typically includes detailed references to the original security documents, precise descriptions of the released collateral, and necessary authorizations. The document serves as crucial evidence of the release of security interests and may need to be registered with relevant authorities, particularly for immovable property.

What sections should be included in a Collateral Release Letter?

1. Letter Header: Official letterhead of the secured party/lender, including full legal name, address, and date

2. Addressee Details: Full details of the borrower/security provider, including registered address

3. Reference Line: Clear reference to the original facility/loan agreement and security documents

4. Subject Line: Clear indication that this is a Collateral Release Letter

5. Opening Statement: Reference to the security provider's request for release and confirmation of debt satisfaction if applicable

6. Security Document Reference: Detailed reference to all security documents being discharged

7. Release Declaration: Clear and unambiguous statement releasing the security interest

8. Collateral Description: Precise description of the collateral being released

9. Authorization Statement: Confirmation of proper authorization to release the security interest

10. Closing: Formal closing and signature block with authorized signatory details

What sections are optional to include in a Collateral Release Letter?

1. Partial Release Statement: Required when only part of the collateral is being released while maintaining security over other assets

2. Conditions Precedent: Include when the release is subject to certain conditions being met

3. Return of Original Documents: Statement regarding the return of original security documents, if applicable

4. Filing Instructions: Instructions regarding any necessary filing or registration of the release with authorities

5. Reservation of Rights: Statement reserving rights over other securities or facilities when applicable

What schedules should be included in a Collateral Release Letter?

1. Schedule 1 - Details of Original Security Documents: List of all security documents being released, including dates, parties, and registration details

2. Schedule 2 - Description of Released Collateral: Detailed technical or legal description of the collateral being released

3. Schedule 3 - Outstanding Security Interests: List of security interests that remain in force (for partial releases)

4. Appendix A - Corporate Authorizations: Copies of relevant board resolutions or authorizations for executing the release

5. Appendix B - Supporting Documents: Copies of relevant satisfaction of charge certificates or other supporting documentation

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Document Type

Release of Lien

Cost

Free to use
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Infrastructure

Energy

Telecommunications

Healthcare

Retail

Agriculture

Transportation and Logistics

Technology

Mining and Resources

Relevant Teams

Legal

Finance

Credit Risk

Compliance

Corporate Secretarial

Treasury

Loan Administration

Security and Collateral Management

Portfolio Management

Documentation

Risk Management

Relevant Roles

Legal Counsel

Finance Manager

Credit Risk Manager

Loan Officer

Security Trustee

Compliance Officer

Corporate Secretary

Document Controller

Portfolio Manager

Relationship Manager

Security Agent

Treasury Manager

Chief Financial Officer

Head of Credit

Risk Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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