Document background
The Running Account Credit Agreement is a fundamental banking document used in India when establishing ongoing credit facilities between financial institutions and borrowers. It is particularly relevant for businesses requiring working capital finance or individuals needing flexible credit arrangements. The agreement must comply with Indian banking regulations, including RBI guidelines, the Banking Regulation Act, and other relevant financial sector legislation. It typically includes comprehensive details about credit limits, interest calculations, security arrangements, operational procedures, and default remedies. The document serves as the primary agreement governing the revolving credit relationship, incorporating both mandatory regulatory requirements and commercial terms agreed between the parties. It's designed to provide flexibility in credit utilization while maintaining necessary controls and security for the lending institution.
