Abstract
Bank being a financial institution the primary function is to give out money or in banking terms lend money under the blanket name and function of “LOAN”. The said loan can be delivered to the consumers of a corporate/firm/bank under different product titles and there are various regulations on the lending and borrowing of money from such financial institutions and such loan facilities can be both Funded or/and Non funded facilities depending upon the necessities and position of the borrower and the risk analysis of the Bank along with the RBI regulations on the amount of money which can be given out in the market as credit or loan facilities to maintain the market and fluidity in it. The types of fund loans and non fund loans, term loans, working capital loans, the role of consortium the play of pari passu charges and sharing of the same along with multiple banking arrangements, title verification and the search reports, the significance of R.O.C(Registrar of Companies), the process pre and post lending procedures that the bank undergo like the scrutiny and in depth analysis of the borrowers financial statements from CIBIL scores to D.S.C.R to Director background, due diligence etc and the end purpose of loan and most importantly the procedure and process of lending understood through agreements(ex- Multiple Facility Agreement, Term Loan Agreement etc.) and cross referring the same with the statutes governing like the Banking Regulation Act 1949, Transfer of Property Act 1882, Companies Act 2013, Insolvency and Bankruptcy Code and other important statutes.
Keywords- Bank lending, credit facilities, funded, non-funded, securities, borrowing, agreements, lending, debt recovery, enforcement, loans,, verification, reports, charges, due diligence, parties, contract, performance, default, repayment, finance, regulation, compliance, funds
Introduction
The banking regime and its related tools are spanning from a single party, a biparty and a tri party agreements and facilities which consists of various loan procedures that are executed on various conditions from the lender and towards the borrower. The lending procedure here is concentrated more on the corporate borrowing on a wider angle and is meant to showcase a basic and good understanding of how the facilities are made, who makes it? Why is it made? And at what conditions? The various statutes regulating the overall national and international loan procedures. The paper focuses mainly on the nature of the parties and the types of funds imbursed and its repayment through various banking forms and the contingencies arising upon the event of default or non- repayment of the loan which leads to the execution of securities and legal claim powers conferred on the lenders as a leverage against the borrowers. Banking and finance tool help shape the monetary policies, liquidity and the economy along with the catering of growing consumer/customer needs, where each borrower having different nature of needs and different facilities arranged for each of their needs as a single or multi-faceted arrangements accordance to the main 7 C’s and 5 C’s of banking in lending procedures.