A Credit Extension Letter is a crucial document in Malaysian banking practice that formalizes the offer of credit facilities from a financial institution to a borrower. It is typically issued after internal credit approval processes and serves as the primary document outlining the terms and conditions of the approved facility. The letter must comply with Malaysian banking regulations, including the Financial Services Act 2013 and Bank Negara Malaysia guidelines, while incorporating necessary consumer protection elements. It is used when a new credit facility is approved or when existing facilities are being modified or renewed. The document includes essential information such as facility limits, interest rates, tenure, security requirements, and conditions precedent, forming the basis of the credit relationship between the institution and the borrower.
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1. Letter Header: Bank's letterhead, date, reference number, and addressee details
2. Subject Line: Clear indication that this is a Credit Extension Letter with reference to any existing facilities
3. Opening Statement: Confirmation of credit approval and reference to any prior applications or discussions
4. Facility Details: Type of credit facility, amount approved, and purpose of the facility
5. Key Terms: Interest rate, tenure, repayment schedule, and processing fees
6. Conditions Precedent: Mandatory conditions that must be fulfilled before the facility becomes effective
7. Representations and Undertakings: Basic declarations required from the borrower and ongoing obligations
8. Events of Default: Key circumstances that would constitute default
9. Acceptance Section: Space for borrower's acknowledgment and acceptance of terms
10. Signature Block: Authorized signatories from the bank and space for customer's signature
1. Security Requirements: Include when the facility requires collateral or guarantees
2. Insurance Requirements: Include when specific insurance coverage is required for the facility
3. Special Conditions: Include when there are customer-specific conditions or requirements
4. Regulatory Disclaimers: Include when specific regulatory notices are required based on facility type
5. Cross-Default Provisions: Include when the facility is linked to other existing facilities
6. Purpose Restrictions: Include when the facility has specific usage restrictions or requirements
1. Schedule A - Facility Details: Detailed breakdown of the credit facility terms, limits, and pricing
2. Schedule B - Repayment Schedule: Detailed payment schedule if applicable
3. Schedule C - Security Details: Details of any required security or collateral if applicable
4. Schedule D - Fees and Charges: Comprehensive list of all applicable fees and charges
5. Appendix 1 - Required Documents: List of documents required for facility activation
6. Appendix 2 - Standard Terms and Conditions: Bank's standard terms and conditions referenced in the letter
Relevant legal definitions
Clauses
Relevant Industries
Banking and Financial Services
Commercial Real Estate
Manufacturing
Retail
Construction
Technology
Agriculture
Healthcare
Education
Transportation and Logistics
Hospitality
Mining and Resources
Import/Export
Professional Services
Relevant Teams
Legal
Finance
Credit Risk
Compliance
Treasury
Operations
Corporate Banking
Retail Banking
Credit Administration
Risk Management
Corporate Secretariat
Senior Management
Board of Directors
Relevant Roles
Chief Financial Officer
Finance Director
Credit Manager
Risk Management Officer
Legal Counsel
Compliance Officer
Relationship Manager
Credit Analyst
Treasury Manager
Financial Controller
Company Secretary
Managing Director
Chief Executive Officer
Banking Operations Manager
Credit Administration Officer
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