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
1 Answer from Attorneys
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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