Document background
The Revolving Credit Agreement is a fundamental financing document used in Pakistani banking practice when a borrower requires flexible access to credit over an extended period. It is particularly useful for businesses with cyclical working capital needs or varying funding requirements. The agreement must comply with Pakistani banking regulations, including State Bank of Pakistan directives, and can be structured under either conventional or Islamic banking principles. Typically used by corporate borrowers, the document details the facility amount, availability period, draw-down mechanisms, repayment terms, and security arrangements. It includes specific provisions addressing local regulatory requirements, tax implications, and enforcement mechanisms under Pakistani law. The agreement's revolving nature allows borrowers to draw down, repay, and re-borrow funds multiple times during the facility period, providing significant flexibility in managing cash flow needs.
