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Supplemental Loan Agreement for India

Supplemental Loan Agreement Template for India

A Supplemental Loan Agreement under Indian law is a formal legal document that modifies, amends, or adds to the terms of an existing loan agreement between a lender and borrower. This document operates within the framework of Indian contract law and banking regulations, particularly the Banking Regulation Act 1949 and RBI guidelines. It allows parties to adjust loan terms, such as interest rates, repayment schedules, security arrangements, or other conditions, while maintaining the validity of the original agreement. The document must comply with Indian stamp duty requirements and registration laws where applicable.

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What is a Supplemental Loan Agreement?

The Supplemental Loan Agreement is utilized when parties need to modify an existing loan arrangement without completely restating or replacing the original agreement. This document type is particularly relevant in the Indian lending landscape where changing business conditions, regulatory requirements, or party circumstances necessitate amendments to existing loan terms. It's commonly used for adjusting interest rates, extending repayment periods, adding or releasing security, modifying financial covenants, or accommodating corporate restructuring. The agreement must comply with Indian banking regulations, including RBI guidelines, and may require registration under the Registration Act 1908 depending on the nature of amendments. It's essential for maintaining clear documentary evidence of agreed changes while preserving the fundamental lending relationship established in the original agreement.

What sections should be included in a Supplemental Loan Agreement?

1. Parties: Identification of the lender and borrower, including their registered addresses and company details

2. Background: Reference to the original loan agreement, reason for supplemental agreement, and current status

3. Definitions: Key terms used in the agreement, including references to definitions in the original agreement

4. Interpretation: Rules for interpreting the agreement and its relationship with the original loan agreement

5. Amendments to Original Agreement: Specific modifications to the original agreement, clearly stating what is being changed

6. Confirmation of Other Terms: Confirmation that unmodified terms of the original agreement remain in full force

7. Effective Date: When the supplemental agreement takes effect

8. Representations and Warranties: Updated or additional representations and warranties of the parties

9. Governing Law and Jurisdiction: Confirmation of applicable law and jurisdiction

10. Execution: Signature blocks and execution formalities

What sections are optional to include in a Supplemental Loan Agreement?

1. Additional Security: Include if new security or collateral is being added to the loan arrangement

2. Change in Interest Rate: Include if the supplemental agreement modifies the interest rate structure

3. Revised Repayment Terms: Include if payment schedule or terms are being modified

4. Additional Covenants: Include if new covenants or conditions are being added

5. Waiver of Defaults: Include if addressing any existing defaults under the original agreement

6. Conditions Precedent: Include if there are new conditions to be satisfied before the supplement takes effect

7. Fee Provisions: Include if new fees or charges are being introduced

What schedules should be included in a Supplemental Loan Agreement?

1. Schedule 1 - Original Loan Agreement: Copy or reference to the original loan agreement being supplemented

2. Schedule 2 - Amended Terms: Detailed list of specific terms being amended, showing original and new versions

3. Schedule 3 - New Repayment Schedule: Updated repayment schedule if payment terms are modified

4. Schedule 4 - Additional Security Details: Details of any new security or collateral being provided

5. Schedule 5 - Corporate Authorizations: Copies of board resolutions and other corporate approvals for the supplement

6. Appendix A - Conditions Precedent Checklist: List of conditions to be satisfied before effectiveness

7. Appendix B - Form of Compliance Certificate: Updated form of compliance certificate if reporting requirements change

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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