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Bank Loan Agreement for United Arab Emirates

Bank Loan Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions under which a bank provides a loan to a borrower. The document incorporates UAE federal banking regulations, Civil Transactions Law, and Commercial Transactions Law requirements, while potentially including provisions for Sharia compliance. It details loan amount, interest rates, repayment terms, security arrangements, borrower obligations, and enforcement mechanisms, all structured to ensure compliance with UAE Central Bank guidelines and local banking practices.

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Bank Loan Agreement

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What is a Bank Loan Agreement?

The Bank Loan Agreement is a fundamental document in UAE banking operations, essential for both conventional and Islamic banking transactions. It serves as the primary contract between a lending bank and borrower, whether corporate or individual, establishing the legal framework for the lending relationship. The agreement must comply with UAE Federal Law No. 14 of 2018 (Central Bank Law), along with other relevant banking and commercial regulations. It typically includes detailed provisions for loan disbursement, repayment terms, security arrangements, borrower covenants, and default scenarios. The document can be adapted for various lending purposes, from corporate financing to project-specific loans, and may include provisions for both conventional and Sharia-compliant structures to accommodate the UAE's dual banking system.

What sections should be included in a Bank Loan Agreement?

1. Parties: Identification of the lender (bank) and borrower with full legal names and addresses

2. Background: Context of the loan arrangement and purpose of the facility

3. Definitions: Detailed definitions of terms used throughout the agreement, including financial terms and calculation methodologies

4. Facility Details: Specification of loan amount, purpose, and facility type

5. Conditions Precedent: Prerequisites that must be satisfied before loan disbursement

6. Disbursement: Terms and procedures for drawing down the loan

7. Interest and Fees: Interest rate provisions, calculation methods, and applicable fees

8. Repayment Terms: Schedule and methods of repayment, including prepayment provisions

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

12. Security: Details of collateral and security arrangements

13. Undertakings: Specific promises and commitments made by the borrower

14. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction details

15. Notices: Communication procedures and contact details

16. Miscellaneous: Standard boilerplate provisions including severability, amendments, and assignment

What sections are optional to include in a Bank Loan Agreement?

1. Islamic Finance Provisions: Required if the loan needs to be Sharia-compliant, including specific Islamic financing structures

2. Guarantees: Include when there are third-party guarantors for the loan

3. Syndication Provisions: Required for syndicated loans involving multiple lenders

4. Currency Provisions: Include for loans involving multiple currencies or currency conversion

5. Insurance Requirements: Detailed section required when specific insurance coverage is mandatory

6. Tax Provisions: Detailed tax considerations when complex tax structures are involved

7. Account Bank Provisions: Required when specific account management structures are needed

8. Change of Control: Include for corporate borrowers where ownership change restrictions are important

What schedules should be included in a Bank Loan Agreement?

1. Facility Summary: Detailed breakdown of the facility amount, purpose, and key terms

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

3. Conditions Precedent Documents: List of required documents and conditions to be satisfied

4. Security Details: Comprehensive list and description of security/collateral

5. Form of Drawdown Notice: Template for borrower to request loan disbursement

6. Fee Schedule: Detailed breakdown of all applicable fees and charges

7. Form of Compliance Certificate: Template for periodic compliance reporting

8. Authorized Signatories: List of authorized representatives for both parties

9. Required Insurance: Details of required insurance coverage and terms

Authors

Alex Denne

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

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions











































Clauses






































Relevant Industries

Banking and Financial Services

Real Estate

Construction

Manufacturing

Trading

Retail

Healthcare

Education

Technology

Transportation and Logistics

Hospitality

Energy and Utilities

Professional Services

Islamic Finance

Relevant Teams

Legal

Finance

Compliance

Risk Management

Credit

Corporate Banking

Islamic Banking

Treasury

Operations

Documentation

Relationship Management

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Compliance Officer

Credit Risk Manager

Relationship Manager

Treasury Manager

Corporate Banking Manager

Islamic Banking Specialist

Loan Officer

Credit Analyst

Financial Controller

Company Secretary

Risk Management Officer

Banking Operations 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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