The Letter for Overfacility is a crucial banking document used in the Indian financial sector when a borrower requires additional credit facilities beyond their existing sanctioned limits. This document is typically issued when a business faces temporary working capital needs, expansion requirements, or unforeseen financial obligations that exceed their current credit arrangements. The letter serves as both a formal approval and a legal record of the additional facility, detailing critical information such as the approved amount, purpose, interest rates, tenure, security requirements, and specific conditions that must be met. Under Indian banking regulations, particularly RBI guidelines, such overfacilities must be properly documented to ensure compliance with credit exposure norms and risk management protocols. The document forms part of the broader credit facility documentation and may require additional security or modified terms compared to the original facility.
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1. Bank Details and Date: Letter head with bank details, branch information, reference number and date
2. Recipient Details: Complete name and address of the borrower/customer
3. Subject Line: Clear indication that this is regarding approval of overfacility/additional credit facility
4. Reference to Existing Facility: Details of the existing credit facility, account numbers, and previous sanction details
5. Overfacility Amount and Purpose: Clear statement of the additional facility amount approved and its intended purpose
6. Terms and Conditions: Key terms including interest rate, tenure, and repayment schedule for the overfacility
7. Security Details: Information about additional security/collateral if required for the overfacility
8. Validity Period: Timeline for which the overfacility approval is valid
9. Compliance Requirements: Any specific compliance or documentation requirements to activate the facility
10. Closing and Signatures: Standard closing, authorized signatory details and bank stamp
1. Special Covenants: Additional conditions or covenants specific to high-risk or high-value overfacilities
2. Insurance Requirements: Specific insurance requirements if additional coverage is needed for the overfacility
3. Additional Reporting Requirements: Extra reporting or monitoring requirements for certain types of facilities
4. Cross-Default Provisions: Specific provisions linking this overfacility to other facilities, if applicable
5. Regulatory Disclosures: Additional regulatory disclosures required for certain types of borrowers or facilities
1. Schedule 1 - Facility Details: Detailed breakdown of the existing and new facility limits, purposes, and tenures
2. Schedule 2 - Interest and Charges: Comprehensive list of applicable interest rates, processing fees, and other charges
3. Schedule 3 - Security Details: Detailed list of existing and additional security/collateral requirements
4. Appendix A - Compliance Checklist: List of documents and compliance requirements to be fulfilled
5. Appendix B - Disbursement Schedule: If applicable, schedule of disbursement tranches and conditions
Relevant legal definitions
Applicable Law
Banking Day
Base Rate
Borrower
Credit Facility
Default Interest
Existing Facility
Event of Default
Facility Limit
Financial Year
Interest Period
Lender
MCLR
Original Sanction Letter
Overfacility
Overfacility Period
Processing Fees
Purpose
RBI
Reference Rate
Repayment Schedule
Review Date
Sanction Terms
Security
Security Documents
Specified Purpose
Validity Period
Banking Day
Base Rate
Borrower
Credit Facility
Default Interest
Existing Facility
Event of Default
Facility Limit
Financial Year
Interest Period
Lender
MCLR
Original Sanction Letter
Overfacility
Overfacility Period
Processing Fees
Purpose
RBI
Reference Rate
Repayment Schedule
Review Date
Sanction Terms
Security
Security Documents
Specified Purpose
Validity Period
Clauses
Facility Amount
Purpose
Interest Rate
Tenor
Repayment Terms
Security
Conditions Precedent
Representations and Warranties
Covenants
Events of Default
Additional Security
Fees and Charges
Documentation
Compliance Requirements
Insurance
Notices
Governing Law
Jurisdiction
Force Majeure
Cross Default
Assignment
Validity Period
Review Rights
Purpose
Interest Rate
Tenor
Repayment Terms
Security
Conditions Precedent
Representations and Warranties
Covenants
Events of Default
Additional Security
Fees and Charges
Documentation
Compliance Requirements
Insurance
Notices
Governing Law
Jurisdiction
Force Majeure
Cross Default
Assignment
Validity Period
Review Rights
Relevant Industries
Banking
Financial Services
Manufacturing
Retail
Real Estate
Infrastructure
Agriculture
Information Technology
Pharmaceuticals
Automotive
Textiles
Construction
Trading
Logistics
Healthcare
Relevant Teams
Credit
Risk Management
Legal
Compliance
Corporate Banking
Operations
Finance
Treasury
Credit Administration
Documentation
Relationship Management
Relevant Roles
Credit Manager
Branch Manager
Relationship Manager
Risk Officer
Corporate Banking Officer
Credit Analyst
Legal Counsel
Compliance Officer
Chief Financial Officer
Finance Manager
Treasury Manager
Credit Administration Officer
Banking Operations Manager
Corporate Finance Manager
Financial Controller
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