The Credit Approval Letter is a crucial document in Indonesian banking practice that serves as the formal communication of a bank's decision to extend credit facilities to a borrower. It is typically issued following a comprehensive credit assessment process and precedes the execution of detailed facility agreements. The document must align with Indonesian banking regulations, including Bank Indonesia and OJK requirements, and typically includes essential information about the approved facility, conditions for drawdown, security requirements, and key commercial terms. The Credit Approval Letter forms the basis for subsequent credit documentation and is often required for internal compliance, audit purposes, and regulatory reporting. It serves as a preliminary commitment from the bank, subject to the fulfillment of specified conditions and the execution of detailed facility documentation.
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1. Letter Header: Bank's letterhead, reference number, date, and classification (e.g., confidential)
2. Recipient Details: Complete name and address of the credit applicant
3. Subject Line: Clear indication that this is a Credit Approval Letter with reference to the application
4. Credit Facility Overview: Brief summary of the approved credit facility type and amount
5. Key Terms and Conditions: Essential terms including interest rate, tenure, and repayment schedule
6. Security Requirements: Required collateral, guarantees, or other security arrangements
7. Conditions Precedent: Conditions that must be fulfilled before the credit facility becomes effective
8. Representations and Undertakings: Key promises and commitments required from the borrower
9. Validity Period: Time period for which the approval remains valid
10. Acceptance Instructions: Steps for accepting the offer and proceeding with documentation
1. Insurance Requirements: Required when the credit facility requires specific insurance coverage
2. Special Conditions: Additional conditions specific to the borrower's business or credit type
3. Financial Covenants: For corporate borrowers where specific financial ratios must be maintained
4. Project Milestones: For project financing where disbursement is linked to project progress
5. Syndication Terms: Required for syndicated facilities involving multiple lenders
6. Foreign Exchange Provisions: For facilities involving foreign currency exposure
1. Facility Details Schedule: Detailed breakdown of credit facility terms, limits, and pricing
2. Repayment Schedule: Detailed amortization table or repayment structure
3. Security Details: Comprehensive list and description of required collateral
4. Required Documents: Checklist of documents required for credit documentation
5. Fee Schedule: Breakdown of all applicable fees and charges
6. Disbursement Schedule: For facilities with multiple tranches or conditional disbursements
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
Real Estate and Property
Manufacturing
Trade and Commerce
Agriculture
Mining and Resources
Construction
Technology
Tourism and Hospitality
Transportation and Logistics
Healthcare
Education
Retail
Relevant Teams
Credit Risk
Legal
Compliance
Credit Administration
Operations
Treasury
Finance
Risk Management
Corporate Banking
Retail Banking
Credit Committee
Board of Directors
Internal Audit
Relevant Roles
Credit Officer
Relationship Manager
Branch Manager
Credit Risk Manager
Chief Credit Officer
Legal Counsel
Compliance Officer
Credit Analyst
Credit Administration Manager
Treasury Manager
Chief Financial Officer
Chief Risk Officer
Credit Committee Member
Board Director
Senior Credit Manager
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