Legal Question in Banking Law in

Scenario:

Client �XYZ� is private limited company and is availing credit facilities from 04 banks namely �A� (holding 1st charge), �B� (holding 2nd charge), �C� (holding 3rd charge) and �D� (holding 4th charge). Now, we, Bank E, wants to extend credit facilities with 1st ranking pari-passu charge.

Query:

Can we complete 1st ranking pari-passu charge doing the followings?

a. We shall obtain NOC for creating 1st ranking pari-passu charge from Bank �A� (1st charge holder) and,

b. We shall obtain NOC from B ,C,D Banks simply for creating charge on the assets of the company.

Shall it be legally enforcable?

Asked on 10/04/10, 6:10 am

0 users found helpful

0 attorneys agreed

The way you thought is the best to have a first ranking pari-passu charge. This will protect you legally.

Answered on 10/05/10, 6:50 am

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