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Credit Support Agreement Template for Pakistan

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Key Requirements PROMPT example:

Credit Support Agreement

"I need a Credit Support Agreement governed by Pakistani law for a conventional banking arrangement between ABC Bank Limited and XYZ Corporation, with the agreement taking effect from March 1, 2025, covering multiple currency transactions and including specific provisions for cross-border collateral arrangements."

Document background
The Credit Support Agreement serves as a critical risk mitigation tool in Pakistani financial markets, providing a legal framework for collateral arrangements and credit enhancement structures. This document is typically used in conjunction with primary financing arrangements, derivatives transactions, or other financial obligations where one party seeks to secure its exposure against another. The agreement must comply with Pakistani legislation, including the Banking Companies Ordinance 1962, Financial Institutions (Recovery of Finances) Ordinance 2001, and State Bank of Pakistan regulations. It becomes particularly relevant in scenarios involving significant financial exposures, cross-border transactions, or complex financial products where credit risk needs to be managed effectively through formal security arrangements.
Suggested Sections

1. Parties: Identification of the credit support provider, credit support receiver, and any other relevant parties

2. Background: Context of the agreement, reference to primary obligations, and purpose of the credit support arrangement

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and references to relevant Pakistani legislation

4. Credit Support Obligations: Core obligations of the credit support provider, including types of eligible credit support and delivery mechanisms

5. Valuation and Calculations: Methods for valuing credit support, calculation of exposure, and margin requirements

6. Delivery and Return of Credit Support: Procedures and timing for delivering and returning credit support, including settlement mechanisms

7. Rights and Obligations: Detailed rights and obligations of each party regarding the credit support

8. Events of Default: Circumstances constituting default and consequences thereof

9. Early Termination: Provisions for early termination and its consequences

10. Representations and Warranties: Standard and specific representations and warranties by each party

11. Tax Provisions: Treatment of taxes, including stamp duty and registration fees under Pakistani law

12. Governing Law and Jurisdiction: Confirmation of Pakistani law as governing law and jurisdiction arrangements

Optional Sections

1. Security Interest Provisions: Required when credit support involves creation of security interests requiring registration under Pakistani law

2. Currency Provisions: Required for cross-border arrangements involving foreign currency considerations

3. Central Bank Compliance: Required when the arrangement needs specific State Bank of Pakistan approvals or compliance

4. Islamic Banking Provisions: Required when the agreement needs to comply with Islamic banking principles

5. Third Party Rights: Required when third party rights need to be addressed or excluded

6. Agent Provisions: Required when an agent is appointed to manage credit support arrangements

Suggested Schedules

1. Schedule 1 - Eligible Credit Support: Details of types of assets/collateral acceptable as credit support

2. Schedule 2 - Valuation Percentages: Haircuts and valuation percentages for different types of credit support

3. Schedule 3 - Contact Details: Administrative and operational contact information for all parties

4. Schedule 4 - Forms: Standard forms for credit support delivery, returns, and notices

5. Schedule 5 - Existing Security Interests: Details of any pre-existing security interests affecting the credit support

6. Appendix A - Calculation Methods: Detailed methodology for exposure and collateral calculations

7. Appendix B - Required Approvals: List of regulatory approvals obtained or required under Pakistani law

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

















































Clauses




































Relevant Industries

Banking

Financial Services

Investment Banking

Corporate Finance

Islamic Banking

Asset Management

Securities Trading

Insurance

Commercial Banking

Investment Management

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Finance

Banking Operations

Securities Operations

Credit Risk

Islamic Banking

Collateral Management

Relevant Roles

Chief Financial Officer

Treasury Manager

Risk Management Officer

Legal Counsel

Compliance Officer

Credit Risk Manager

Corporate Finance Manager

Banking Operations Manager

Financial Controller

Securities Operations Manager

Collateral Manager

Islamic Banking Officer

Transaction Manager

Finance Director

Industries









Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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