Proper Documentation – Loans
The banks and the financials institutions after sanctioning the loans and the cash advance to various corporate and firms should ensure that there is proper documentation done for the loans and the cash advances granted to the corporate, firms or individuals. The documentation is the term used to describe the execution of documents in proper form and in accordance with the requirements of the law. Proper documentation constitutes the legal security of the bank and the financial institutions since it established the legal nexus between the banks or the financial institutions and the borrower. When the documents are properly drawn up, when they are properly executed and are stamped as required under law and also attested and registered whenever and wherever required by law the right and the obligations of the banks and the financial institutions and the borrower can be said to have been properly established. There are different types of documents that needs to be executed by the borrower while taking the loans from the banks and the financial institutions. These documents can be either primary documents or the secondary documents. It should be noted that a document before it can be admitted as a evidence has to satisfy several requirements under the law.