Document background
The Master Credit Agreement serves as the foundational document for establishing and governing credit facilities in India, typically used when parties anticipate an ongoing lending relationship with multiple drawdowns over time. It provides a comprehensive framework that complies with Indian banking regulations, the Reserve Bank of India guidelines, and relevant financial legislation. The agreement is designed to eliminate the need for separate loan agreements for each drawdown while maintaining flexibility for varying credit requirements. It includes detailed provisions for facility limits, drawdown mechanics, security arrangements, covenants, and events of default, making it suitable for both secured and unsecured lending arrangements. This type of agreement is particularly useful for corporate borrowing, working capital facilities, and term loans where a long-term credit relationship is contemplated.
