Document background
The Promissory Note For Bank Loan is a fundamental document in Indian banking transactions, regulated primarily by the Negotiable Instruments Act, 1881, and the Banking Regulation Act, 1949. It is used whenever a bank extends a loan to a borrower, whether an individual or a business entity. The document serves multiple purposes: it evidences the debt, specifies the terms of repayment, and provides the bank with a legally enforceable instrument for recovery. The note must contain specific elements to be valid under Indian law, including an unconditional promise to pay, a definite sum, identified parties, and clear payment terms. It's particularly important as it can be used as evidence in debt recovery proceedings and can be presented before Debt Recovery Tribunals or courts in case of default.
