Agreement for Cash Credit

Agreement for Cash Credit

The …….……………… Bank ….………………. (hereinafter called the bank) through their office at ………………… having at the request of …………. (hereinafter called the borrowers) undertaken to open in the books of the bank at ………………..a cash credit account with the borrowers up to the maximum limit of Rs. ………….…….

It is agreed as follows:

1. That the bank shall not, under this agreement, be required to make advances of such an amount that the total dues in this account including interest and other charges may, at any time, exceed the sum of Rs……………..

The borrowers shall, however, be responsible for the payment of the entire amount that may at any time be due in this account although such amount may exceed the above-mentioned limit.

2. That interest at the rate of ………… per cent per …………… shall be calculated on the daily balance of the said account and shall be charged to the account on the last working day of each month and it will form part of the principal and will carry interest at the above-mentioned rate.

3. That on the ………………. day of ………….. 19 ……… next or on demand being made by the bank on any earlier date, the borrowers shall pay to the bank the balance then outstanding and owing to the bank on the said account inclusive of interest at the rate above mentioned to the date of payment together with all the charges and expenses charged or incurred by the bank as ascertained by the books of the said bank which the borrowers agree to accept as sufficient proof of the correctness thereof, without the production of any voucher or paper.

4. That the head office of the bank or the said Branch will be at liberty to sue the borrowers at ……..……… or at ……………………

5. That the borrowers will be liable for all costs of recovery incurred by the bank before filing a suit and also for all costs in connection with the suit till recovery of full amount, whether such costs may be allowed by rules of court or not.

6. That a relative pronote dated ………… has been given to the bank by the borrowers to secure payment of any sum which may at any time be due to the bank on such account.

7. That the borrowers agree that when the Reserve Bank rate of discount is …….. per cent or above, they will pay as interest 1 per cent above the said Reserve Bank rate.

8. That the borrowers agree to pay incidental charges for every six months or part thereof (according to labour involved) during the time the account remains open.

9. That the borrowers shall not be entitled to any interest for any sum which may at any time stand to their credit in this account.

10. That the bank will always be at liberty to stop making advances at any time without previous notice and without assigning any reason, even though the said limit of Rs. ……….. has not been fully availed of.

11. That the borrowers further agree to pay interest at the stipulated rate on …….. portion of the aforesaid limit even if the limit is not availed of at all or an amount less than the aforesaid portion is borrowed.

Witnessed by:                                                               Signature of borrower or borrowers

………………………………..                                           ……………………………………..…….

Address ………………………….                                        Address …………………..……………

Dated ……………………                                                   Dated ………………………

For the  …….……………..  Bank

Witnessed by:                               Manager

…………………….……………..

Address ……………….. ……..                                          Dated ……………………

Dated ……………….…

………………………………..

………………………………..

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