Document background
The Voluntary Credit Agreement is a fundamental document in Pakistani banking and finance, used when parties wish to establish a formal credit arrangement on mutually agreed terms. This document is essential for both conventional and Islamic banking transactions in Pakistan, requiring compliance with multiple regulations including the Banking Companies Ordinance 1962 and Financial Institutions Ordinance 2001. It's particularly important for documenting credit facilities where the borrower voluntarily seeks financing and both parties agree to specific terms without external pressure or mandatory lending requirements. The agreement typically includes detailed provisions on credit amount, interest or profit rates, repayment terms, security arrangements, and default consequences, all structured to ensure enforceability under Pakistani law.
