Document background
The Loan Deferment Agreement is a crucial document used when borrowers require temporary relief from their loan payment obligations under Indian law. This agreement becomes necessary during various circumstances such as economic downturns, business disruptions, or temporary cash flow issues faced by borrowers. The document formally modifies the original loan agreement's payment terms while keeping other conditions intact. It typically includes details about the deferment period, revised payment schedule, interest treatment, and any additional conditions or securities required by the lender. The agreement must comply with Reserve Bank of India (RBI) guidelines on loan restructuring and the Banking Regulation Act. It serves as a protective mechanism for both lenders and borrowers by clearly documenting the modified terms and preventing future disputes about the deferred payment arrangement.
