Document background
The Line of Credit Agreement serves as a fundamental financing instrument in Pakistan's banking sector, providing businesses with flexible access to credit up to a predetermined limit. This document is essential when companies require ongoing access to funds for working capital, operational expenses, or business expansion. The agreement must comply with Pakistani banking regulations, including the Banking Companies Ordinance 1962 and State Bank of Pakistan directives, while potentially incorporating Islamic banking principles if required. It details crucial elements such as credit limits, interest rates, security arrangements, drawdown procedures, and repayment terms, providing a comprehensive framework for the credit relationship between the financial institution and the borrower. The document is particularly relevant in situations requiring revolving credit facilities rather than term loans, offering borrowers the flexibility to draw and repay funds multiple times within the facility limit.
