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The Interest Bearing Loan Agreement is a fundamental financing document used in Indian commercial and personal lending transactions. It serves as the primary contract between lenders (such as banks, financial institutions, or private lenders) and borrowers seeking funds for various purposes. The agreement must comply with Indian banking regulations, particularly RBI guidelines on interest rates and fair lending practices. This document is essential when there's a need to formalize a loan arrangement where interest will be charged, whether for business expansion, asset acquisition, working capital, or other purposes. The agreement includes detailed provisions on interest calculation, payment schedules, security (if applicable), events of default, and enforcement mechanisms, all within the framework of Indian contract law and banking regulations.

1. Parties: Identifies and defines the Lender and Borrower with their complete details including registration/identification numbers and addresses

2. Background: Sets out the context of the loan, including the Borrower's request and Lender's agreement to provide the loan

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. The Loan: Specifies the principal amount, purpose, and conditions precedent for disbursement

5. Interest: Details the interest rate, calculation method, payment periods, and default interest provisions

6. Repayment: Establishes the repayment schedule, prepayment terms, and method of payment

7. Representations and Warranties: Contains standard representations by the Borrower about their legal status, capacity, and financial condition

8. Covenants: Sets out positive and negative obligations of the Borrower during the loan term

9. Events of Default: Lists circumstances that constitute default and their consequences

10. Remedies: Specifies the Lender's rights and remedies upon occurrence of an Event of Default

11. Expenses and Indemnity: Allocates responsibility for costs and establishes indemnification obligations

12. Notices: Specifies how formal communications between parties should be made

13. Governing Law and Jurisdiction: Establishes Indian law as governing law and specifies jurisdiction for disputes

14. Miscellaneous: Contains standard boilerplate provisions including amendments, assignments, and severability