Credit Arrangement Letter Template for Malaysia

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Key Requirements PROMPT example:

Credit Arrangement Letter

"I need a Credit Arrangement Letter for a medium-sized manufacturing company seeking a RM 5 million working capital facility from Bank Negara Malaysia, with the facility to commence in March 2025 and including provisions for equipment purchase and inventory financing."

Document background
The Credit Arrangement Letter serves as a formal offer document from financial institutions to potential borrowers in Malaysia, outlining the terms and conditions of proposed credit facilities. This document is essential in the Malaysian banking sector, where it must comply with both conventional banking regulations under the Financial Services Act 2013 and Islamic banking principles under the Islamic Financial Services Act 2013 when applicable. It is typically used when a financial institution has approved a credit facility and needs to communicate the detailed terms to the borrower. The letter includes critical information such as facility limits, interest rates, tenure, security requirements, and conditions precedent, serving as the foundation for the subsequent credit relationship between the bank and borrower. It forms a legally binding document once accepted by the borrower and must adhere to Bank Negara Malaysia's guidelines on transparency and fair dealing.
Suggested Sections

1. Bank Details and Reference: Letter heading with bank's details, reference number, and date

2. Recipient Details: Full name and address of the borrower

3. Facility Type and Amount: Clear statement of the type of credit facility being offered and the approved amount

4. Interest Rate and Fees: Detailed breakdown of applicable interest rates, processing fees, and other charges

5. Tenure and Repayment Terms: Duration of the facility and specific repayment obligations

6. Security Requirements: Details of any collateral, guarantees, or other security required

7. Key Conditions Precedent: Essential conditions that must be met before the facility becomes effective

8. Events of Default: Circumstances that would constitute default and their consequences

9. Acceptance Section: Space for borrower's acknowledgment and acceptance of terms

Optional Sections

1. Islamic Banking Requirements: Required when the facility is Shariah-compliant, outlining relevant Islamic banking principles and requirements

2. Insurance Requirements: Include when specific insurance coverage is required as part of the facility

3. Special Conditions: Any unique terms or conditions specific to the borrower or facility type

4. Purpose Limitation: Include when the credit facility is restricted to specific uses

5. Cross-Default Provisions: Required when the facility is linked to other banking facilities or agreements

Suggested Schedules

1. Schedule 1 - Facility Details: Detailed breakdown of the facility amount, interest calculations, and repayment schedule

2. Schedule 2 - Fees and Charges: Comprehensive list of all applicable fees, charges, and commission rates

3. Schedule 3 - Security Documents: List and details of required security documents and guarantees

4. Schedule 4 - Conditions Precedent: Complete list of all conditions that must be fulfilled before drawdown

5. Appendix A - Standard Terms and Conditions: Bank's standard terms and conditions applicable to the facility

6. Appendix B - Supporting Document Requirements: List of documents required from the borrower for facility activation

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 Industries

Banking and Financial Services

Real Estate and Property Development

Manufacturing

Retail and Commerce

Agriculture and Plantation

Construction

Technology and Innovation

Healthcare

Education

Hospitality and Tourism

Transportation and Logistics

Energy and Utilities

Small and Medium Enterprises (SMEs)

Islamic Banking

Relevant Teams

Legal

Credit Risk

Corporate Banking

Retail Banking

Compliance

Operations

Credit Administration

Treasury

Finance

Risk Management

Islamic Banking

Documentation

Relevant Roles

Credit Officer

Relationship Manager

Credit Risk Manager

Branch Manager

Corporate Banking Officer

Legal Counsel

Compliance Officer

Credit Administrator

Chief Financial Officer

Finance Manager

Treasury Manager

Banking Operations Manager

Credit Analyst

Risk Assessment Officer

Company Secretary

Financial Controller

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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