The Pro Forma Loan Agreement serves as a standardized template for lending transactions in India, designed to comply with Indian banking laws, RBI guidelines, and the Indian Contract Act, 1872. This document is typically used when establishing a formal lending relationship between financial institutions and borrowers, whether corporate entities or individuals. It contains all essential provisions required under Indian law, including loan terms, security arrangements, representations and warranties, covenants, and events of default. The agreement can be customized based on specific transaction requirements while maintaining compliance with regulatory requirements. It's particularly useful for banks, NBFCs, and other financial institutions that regularly engage in lending activities within India, providing a consistent and legally compliant framework for loan documentation.

1. Parties: Identifies and provides full details of the lender and borrower, including registration numbers, registered addresses, and authorized representatives

2. Background: Sets out the context of the loan agreement, including the borrower's request for the loan and the lender's agreement to provide it

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

4. Loan Amount and Purpose: Specifies the principal amount of the loan and its intended use

5. Interest Rate and Calculations: Details the applicable interest rate(s), calculation method, and payment frequency

6. Drawdown and Disbursement: Specifies the conditions and procedure for disbursement of the loan amount

7. Repayment Terms: Sets out the repayment schedule, installment amounts, and payment mechanisms

8. Representations and Warranties: Contains standard representations and warranties from the borrower regarding their legal status, capacity, and financial condition

9. Borrower's Covenants: Lists positive and negative covenants that the borrower must comply with during the loan term

10. Events of Default: Defines circumstances that constitute default and their consequences

11. Rights and Remedies: Outlines the lender's rights and remedies in case of default

12. Notices: Specifies how formal communications between parties should be made

13. Governing Law and Jurisdiction: Establishes Indian law as governing law and specifies jurisdiction for dispute resolution

14. Miscellaneous: Contains standard boilerplate provisions including amendments, waivers, and severability