Credit Agreement Contract for India

Credit Agreement Contract Template for India

A comprehensive legal document governed by Indian law that establishes the terms and conditions of a credit facility between a lender and borrower. The agreement details the loan amount, interest rates, repayment terms, security arrangements, and obligations of all parties involved. It incorporates requirements from various Indian regulations including the Banking Regulation Act, RBI guidelines, and the Indian Contract Act, while ensuring compliance with security enforcement mechanisms under SARFAESI Act. The document includes provisions for defaults, remedies, and dispute resolution within the Indian legal framework.

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What is a Credit Agreement Contract?

The Credit Agreement Contract is a fundamental document in Indian banking and finance, used to formalize lending arrangements between financial institutions and borrowers. It serves as the primary agreement governing credit facilities, incorporating requirements from Indian banking regulations, RBI guidelines, and contract law. The document is essential for any lending transaction in India, whether for corporate finance, project funding, or general commercial purposes. It includes comprehensive provisions covering facility terms, security arrangements, representations and warranties, covenants, and enforcement mechanisms. The agreement must comply with various Indian legislations including the Banking Regulation Act, 1949, SARFAESI Act, and the Indian Contract Act, 1872, while adhering to RBI's prescribed interest rate regulations and security creation requirements.

What sections should be included in a Credit Agreement Contract?

1. Parties: Identification of the lender and borrower with complete details including registration numbers and addresses

2. Background: Context of the credit facility, purpose of the loan, and basic transaction structure

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

4. Facility Amount and Purpose: Details of the credit facility amount, type, and permitted purpose of the loan

5. Interest and Fees: Interest rate provisions, calculation methods, payment periods, and applicable fees

6. Drawdown and Disbursement: Conditions and procedures for disbursement of the loan

7. Repayment Terms: Repayment schedule, payment methods, and prepayment provisions

8. Security: Details of collateral or security provided for the loan

9. Representations and Warranties: Statements of fact and assurances given by the borrower

10. Covenants: Positive and negative obligations of the borrower during the loan term

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

12. Remedies: Rights and remedies available to the lender upon default

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

14. Governing Law and Jurisdiction: Applicable law and courts having jurisdiction over disputes

What sections are optional to include in a Credit Agreement Contract?

1. Guarantee: Required when a third party guarantees the loan obligations

2. Insurance: Specific insurance requirements for secured assets or borrower's life insurance

3. Assignment and Transfer: Terms for transferring or assigning rights under the agreement, needed for syndicated loans

4. Force Majeure: Provisions for unforeseen circumstances affecting loan obligations

5. Anti-Money Laundering Provisions: Required for high-value loans or when dealing with specific regulated entities

6. Digital Documentation: Required when agreement execution happens digitally

7. Cross Default: Needed when borrower has multiple facilities or loans

8. Security Trustee: Required in case of multiple lenders or syndicated facilities

What schedules should be included in a Credit Agreement Contract?

1. Facility Terms: Detailed terms of the credit facility including limits, sub-limits, and specific conditions

2. Conditions Precedent: List of documents and conditions to be satisfied before disbursement

3. Security Details: Detailed description of security/collateral including valuation and maintenance requirements

4. Repayment Schedule: Detailed amortization schedule with payment dates and amounts

5. Form of Drawdown Notice: Template for requesting disbursement of loan amounts

6. Financial Covenants: Detailed financial ratios and requirements to be maintained

7. Fee Schedule: Breakdown of all applicable fees and charges

8. KYC Requirements: List of required Know Your Customer documents and compliance requirements

9. Standard Forms: Templates for various notices, certificates, and other standard documents

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

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate

Manufacturing

Infrastructure

Technology

Healthcare

Retail

Agriculture

Education

Transportation and Logistics

Energy and Utilities

Telecommunications

Construction

Mining and Metals

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit

Corporate Banking

Operations

Business Development

Company Secretarial

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Company Secretary

Credit Manager

Risk Manager

Compliance Officer

Treasury Manager

Banking Relationship Manager

Finance Manager

Corporate Lawyer

Investment Officer

Credit Analyst

Contract Manager

Financial Controller

Business Development Manager

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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