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The Credit Approval Letter is a crucial document in Malaysian banking practice that initiates the formal lending relationship between a financial institution and a borrower. It is issued following the bank's internal credit assessment and approval process, serving as the first formal confirmation of the bank's willingness to extend credit facilities. The letter must adhere to Bank Negara Malaysia's guidelines and the Financial Services Act 2013, incorporating mandatory disclosures and key terms. It typically precedes the execution of detailed facility agreements and is used for both corporate and retail lending. The document includes essential information such as facility limits, pricing, security requirements, and conditions precedent, forming the foundation for subsequent detailed documentation. Banks use this document to ensure transparency in lending terms and compliance with regulatory requirements while protecting their interests and clearly communicating their expectations to borrowers.

1. Letter Header: Bank's letterhead, reference number, and date

2. Recipient Details: Customer's name and address

3. Subject Line: Clear indication that this is a Credit Approval Letter

4. Salutation: Formal greeting to the customer

5. Approval Statement: Clear statement of credit approval and reference to the application

6. Facility Details: Type of facility, amount approved, and purpose

7. Key Terms: Interest rate, tenure, repayment schedule

8. Security Requirements: Required collateral or guarantees

9. Conditions Precedent: Conditions that must be met before facility activation

10. Fees and Charges: All applicable fees, charges, and commission

11. Important Notices: Key regulatory disclosures and warnings

12. Acceptance Section: Space for customer's acknowledgment and acceptance

13. Closing: Standard closing, bank's authorized signatories