Loan Sharing Agreement Template for India

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Key Requirements PROMPT example:

Loan Sharing Agreement

"I need a Loan Sharing Agreement for a consortium of three Indian banks sharing a ₹500 crore infrastructure loan, with ICICI Bank as the facility agent and a requirement for quarterly rebalancing of loan shares."

Document background
The Loan Sharing Agreement is a crucial document used in syndicated lending arrangements within the Indian financial sector. It becomes necessary when multiple lenders wish to participate in a single loan facility while maintaining clear rights and responsibilities. The agreement ensures compliance with Indian banking regulations and financial laws, including the Banking Regulation Act, 1949, and RBI guidelines. It typically includes detailed provisions for loan participation percentages, payment distributions, voting rights, security sharing, and default scenarios. This document is particularly important for large-scale financing where risk sharing among lenders is desired, and it provides a framework for coordinated action among multiple financial institutions. The agreement also addresses specific Indian legal requirements regarding stamp duty, registration, and enforceability.
Suggested Sections

1. Parties: Identifies all participating lenders, the facility agent (if any), and the borrower

2. Background: Explains the context of the loan sharing arrangement and the original loan facility

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Loan Sharing Structure: Details the proportion of loan sharing between lenders and their respective commitments

5. Rights and Obligations of Lenders: Outlines the specific rights and responsibilities of each lender in the shared arrangement

6. Payment Mechanics: Describes the procedures for disbursement, repayment, and distribution of payments among lenders

7. Decision Making Process: Establishes voting rights and procedures for making collective decisions regarding the loan

8. Events of Default: Lists circumstances constituting default and their consequences

9. Security Sharing: Details how any security for the loan will be shared among lenders

10. Costs and Expenses: Allocates various costs and expenses among the participating lenders

11. Representations and Warranties: Contains statements of fact and assurances from each lender

12. Confidentiality: Establishes confidentiality obligations regarding the arrangement and shared information

13. Governing Law and Jurisdiction: Specifies the applicable law and courts for dispute resolution

14. Notices: Sets out the procedure for giving notices under the agreement

15. Amendments and Waivers: Describes the process for modifying the agreement or waiving rights

Optional Sections

1. Facility Agent Appointment: Required when a facility agent is appointed to manage the loan sharing arrangement on behalf of lenders

2. Security Agent Provisions: Needed when a security agent is appointed to hold and manage security on behalf of lenders

3. Syndication Provisions: Include when there's potential for additional lenders to join the arrangement

4. Interest Rate Hedging: Required when the loan includes interest rate hedging arrangements

5. Intercreditor Provisions: Needed when there are multiple classes of lenders with different priorities

6. Assignment and Transfer: Include when lenders want the ability to transfer their share of the loan

7. Currency Provisions: Required for multi-currency facilities

8. Tax Gross-up and Indemnities: Include when dealing with cross-border lending or specific tax implications

Suggested Schedules

1. Schedule 1 - Lender Commitments: Detailed breakdown of each lender's share and commitment amount

2. Schedule 2 - Conditions Precedent: List of documents and conditions required before the agreement becomes effective

3. Schedule 3 - Form of Transfer Certificate: Standard form for transferring loan participations between lenders

4. Schedule 4 - Payment Instructions: Banking and payment details for all parties

5. Schedule 5 - Notice Details: Contact information and notice requirements for all parties

6. Schedule 6 - Security Documents: List and copies of all security documents related to the loan

7. Appendix A - Calculation Methodology: Detailed explanation of how payments and shares are calculated

8. Appendix B - Voting Procedures: Detailed procedures for lender voting and decision-making

9. Appendix C - Forms of Notice: Standard forms for various notices required under the agreement

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 | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Investment Banking

Private Equity

Non-Banking Financial Companies (NBFCs)

Infrastructure

Real Estate

Manufacturing

Energy

Telecommunications

Healthcare

Commercial Lending

Relevant Teams

Legal

Finance

Credit

Risk Management

Compliance

Treasury

Banking Operations

Syndications

Corporate Finance

Transaction Management

Portfolio Management

Deal Advisory

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Loan Officer

Credit Manager

Risk Manager

Compliance Officer

Banking Operations Manager

Syndication Manager

Relationship Manager

Treasury Manager

Finance Manager

Credit Analyst

Legal Associate

Company Secretary

Transaction Manager

Portfolio Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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