LOAN AGREEMENT WITH BANK

LOAN AGREEMENT WITH BANK

This agreement is made the ______ day of ____________ in the year ______, between the ____________________ Bank Ltd., a banking company with its registered office at ____________________ (hereinafter called "the Bank") of the One Part;

AND

Mr. ____________________, son of ____________________, residing at ____________________ and doing business under the name and style of ____________________ at ____________________ (hereinafter called "the Borrower") of the Other Part.

WHEREAS the Bank, through its branch at ____________________, has at the request of the Borrower agreed to grant him financial accommodation against his said trade, and for that purpose to allow him overdraft facilities through a cash credit account in the name of ____________________, up to the maximum limit of Rs. ____________.

Now it is hereby agreed by and between the parties as follows:

1. The Bank shall accommodate the Borrower from time to time against his said business by overdraft, as and when needed by the Borrower, up to a maximum limit of Rupees ____________ only, including all interest and other charges; but nevertheless the liability of the Borrower shall not be restricted to the above maximum amount if the borrowings, including interest and other costs, charges and expenditure, exceed the aforesaid agreed limit.

2. The Borrower shall pay interest on the said loan or advance at the rate of ______ percent, on the daily balance of the said account, which shall be debited to his said account on the last working day of each calendar month, forming part of the principal and carrying further interest at the said rate. If the above-stated limit is not availed of by the Borrower for any reason whatsoever, and there remains a credit balance favouring the Borrower, the Borrower shall nevertheless remain liable for paying interest at the specified rate on Rs. ____________.

3. That the account in the books of the Bank shall be final and conclusive against the Borrower as to the amount or amounts owing to the Bank. In addition to the fixed interest, the Borrower shall pay to the Bank the following other charges also:
(i) usual incidental charges every ______ months;
(ii) usual commissions on other services, i.e. outstation cheques, drafts, etc., with other usual charges; and
(iii) customary charges.

4. The property situated at ____________________, bearing number ____________, is hereby mortgaged with the Bank for the purpose of security against this loan. The whole loan is also to be guaranteed by the Borrower in his personal capacity.

5. This agreement shall be enforceable for a period of one year from the date hereof, unless otherwise increased or terminated by the Bank. The Borrower has to apply for renewal one month in advance before the termination of this agreement.

6. On expiry of the period stated in Para 5 above, or at any moment later or earlier, the Borrower shall pay, or cause to be paid, to the Bank on demand the balance then outstanding as owing to the Bank on the said cash credit account (including interest and all other charges and expenses), as appearing from the books of the Bank, which the Borrower has agreed to accept as sufficient and conclusive evidence, as against him, of the amount due from him. In the event of the said demand being neglected and/or not complied with, the Bank shall realise the amount or amounts due through civil process, along with all expenses and charges actually incurred.

IN WITNESS WHEREOF, the parties have set their hands this ______ day of ____________.

DATE: ____________
PLACE: ____________

BORROWER: ________________________

BANK MANAGER: ________________________

WITNESSES:
1. ________________________
2. ________________________