Document background
A Credit Cancellation Letter is utilized when a borrower wishes to formally terminate their credit facility with a financial institution in Pakistan. This document is essential in the Pakistani banking system, where it serves as official evidence of the borrower's request to cancel their credit arrangement and the bank's acknowledgment of the same. The letter must conform to requirements set forth by the State Bank of Pakistan and the Banking Companies Ordinance 1962, including proper authorization, complete facility details, and confirmation of settlement status. It's typically used when loans have been fully repaid, when borrowers want to end unused credit facilities, or during refinancing with different institutions. The document protects both parties by clearly documenting the termination of the credit relationship and confirming that all obligations have been met.
