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The Credit Agreement Letter is a fundamental document in Indian banking and financial services, used when a bank or financial institution approves a credit facility for a borrower. It serves as both a formal communication of credit approval and a legally binding agreement, incorporating essential terms and conditions as per Indian banking regulations. This document is typically issued following a successful credit application and due diligence process, ensuring compliance with the Banking Regulation Act, 1949, and RBI guidelines. The letter details critical aspects such as facility limits, interest rates, security requirements, and borrower obligations, forming the basis for the lending relationship. It's designed to protect both lender and borrower interests while maintaining regulatory compliance in the Indian jurisdiction.

1. Sender Details: Bank/financial institution's letterhead, address, and reference number

2. Date: Date of issuance of the credit agreement letter

3. Recipient Details: Borrower's name and complete address

4. Subject Line: Clear indication that this is a credit agreement/facility letter

5. Salutation: Formal greeting to the borrower

6. Reference to Application: Reference to the borrower's loan application and date

7. Approval Statement: Clear statement of credit approval and basic terms

8. Facility Details: Amount, purpose, and type of credit facility being extended

9. Key Terms: Interest rate, tenure, repayment schedule, and processing fees

10. Security/Collateral: Details of security/collateral required against the credit facility

11. Key Conditions: Essential conditions precedent and subsequent to the credit facility

12. Borrower Covenants: Key promises and obligations of the borrower

13. Default Provisions: Consequences of default and remedies available to the lender

14. Acceptance Block: Space for borrower's acknowledgment and acceptance of terms

15. Closing: Formal closing, bank authorized signatory details