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Intercompany Revolving Loan Agreement Template for India

This document is a comprehensive loan agreement template governed by Indian law, designed for establishing revolving credit facilities between companies within the same corporate group. It incorporates requirements under the Companies Act 2013, RBI regulations, and relevant Indian financial laws. The agreement provides a framework for flexible borrowing and repayment arrangements while ensuring compliance with transfer pricing regulations, related party transaction requirements, and corporate governance standards under Indian law.

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What is a Intercompany Revolving Loan Agreement?

The Intercompany Revolving Loan Agreement is essential for Indian corporate groups requiring flexible internal funding arrangements. It is commonly used when a parent company or group treasury entity needs to provide ongoing financial support to subsidiaries or sister companies, allowing multiple drawdowns and repayments within an approved limit. The document ensures compliance with Indian regulatory requirements, including the Companies Act 2013, RBI guidelines on corporate lending, transfer pricing regulations, and related party transaction rules. This agreement type is particularly valuable for groups with multiple Indian entities needing efficient cash management and internal funding mechanisms, while maintaining proper corporate governance and regulatory compliance.

What sections should be included in a Intercompany Revolving Loan Agreement?

1. Parties: Identification of the lender and borrower companies, including their registration details and addresses

2. Background: Context of the intercompany relationship and purpose of the revolving loan facility

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. The Facility: Details of the revolving loan facility, including the maximum amount and purpose

5. Drawdown: Conditions and procedures for requesting and making drawdowns under the facility

6. Interest: Interest rate, calculation method, and payment terms

7. Repayment and Prepayment: Terms for repayment of drawdowns and provisions for voluntary prepayment

8. Representations and Warranties: Standard corporate representations and warranties from the borrower

9. Covenants: Ongoing obligations of the borrower during the term of the facility

10. Events of Default: Circumstances constituting default and consequences thereof

11. Changes to Parties: Rules regarding assignment and transfer of rights and obligations

12. Notices: Process for giving notices under the agreement

13. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

What sections are optional to include in a Intercompany Revolving Loan Agreement?

1. Security: Include when the loan is to be secured by any assets or guarantees

2. Tax Provisions: Include detailed tax provisions when cross-border elements exist or specific tax treatment is required

3. Currency and Exchange Rate: Include for loans involving multiple currencies

4. Regulatory Compliance: Include specific compliance provisions when dealing with regulated entities

5. Transfer Pricing Compliance: Include when parties are in different tax jurisdictions or specific transfer pricing requirements apply

6. Set-off Rights: Include when parties have multiple financial relationships

7. Subordination: Include when the loan needs to be subordinated to other debts

What schedules should be included in a Intercompany Revolving Loan Agreement?

1. Schedule 1 - Form of Drawdown Request: Standard form for requesting drawdowns under the facility

2. Schedule 2 - Calculation of Interest: Detailed methodology for interest calculation

3. Schedule 3 - Conditions Precedent: List of documents and conditions required before first drawdown

4. Schedule 4 - Repayment Schedule: If applicable, schedule of repayment dates and amounts

5. Schedule 5 - Form of Compliance Certificate: Standard form for periodic compliance certification

6. Appendix A - Board Resolutions: Format of required corporate authorizations

7. Appendix B - Group Structure Chart: Diagram showing relationship between the parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

India

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use

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