Kredit Agreement in Ukraine

1. CREDIT AGREEMENT
Concepts, legal principles and requirements for credit agreements
Guliaiev Alexandr
Makarov Oleh
from the 1-st group

2. Opening sentence
All questions related to bank lending, are handled by the borrower and the Bank by concluding the
credit agreement. So, if you accept the credit Committee of the positive decision about granting a
loan borrower, loan specialist unit along with an employee of the legal service of the Bank prepares
a loan agreement in two copies which have the same legal force.

3. Definition
Credit agreement - is a civil-legal document that defines the
reciprocal rights and duties of legal and economic responsibility of
the Bank and the client (the borrower) regarding the holding of a
credit transaction.

4. In accordance with the article 1054 of the Civil Code of Ukraine, under the
credit agreement, the Bank or other financial institution (lender) obligation to
provide money (credit) to the borrower in the amount and on the terms
established by the contract, and the borrower undertakes to return the loan and
pay interest.

5. LOAN AGREEMENT ADOPTION
Loan agreement adoption between the Bank and the borrower is pretty time-charging process, which
includes a conduction of a legal review of documentation of the borrower and determination all
conditions of future credit transactions.The main requirement to the content of the loan agreement
is that it contains the following legal norms, which would be able to regulate the entire complex
interactions with the client (the borrower).

6. Agreements universality
In the banking practice There are typical forms of credit agreements in the banking practice in
relation to different types of loans that are being developed by the banks themselves and
approved by the appropriate internal banking positions.The specific content of the loan
agreement and a list of all terms and conditions of credit transaction are determined by
agreement of the parties. In each case the contents of the loan agreement adjusts to the
peculiarities of the borrower, taking into account the specificity of its financial and economic
activities.

7. THE MAIN ASPECTS OFTHE LOAN AGREEMENT
ADOPTION
Credit contracts concluded in writing form and can not be changed unilaterally without the
consent of the parties.The participants of the credit agreement are the creditor - banking
institution not sectror Bank or another structural unit (in the case of a breach of this terms
and conditions of the contract is considered null and void), and borrower-legal or physical
person. Changes to the agreement could be made with the consent of both parties. Credit
agreement must be signed by the authorized people of the parties who conclude it.The
subject of the loan agreement is cash.At the request of either party, the credit contract can be
notarized.

8. LOAN AGREEMENT’S STRUCTURE
By its structure, the credit agreement must include the following components:
- A name and a number of the loan agreement;
- A Date and a place of the contract’s conclusion;
- Preamble (official name of Parties);
- the subject of the contract (purpose, amount, interest rate, term, date of
repayment);
- procedure for granting and repayment of a loan;
- calculation and payment of interest;

9. 
The terms of the loan (the contract of pledge, surety, guarantee);

Liabilities of the Bank and the borrower;

Rights of the Bank and the borrower;

Penalties in case of the default or breach of a contract;

procedure for consideration of controversial issues;

special conditions (procedure for amending agreement);

validity;

Legal addresses and bank details of the parties;

signatures of the authorized representatives of the parties.

10. GENERAL REQUIREMENTS A LOAN AGREEMENT
ADOPTION
1) content of the loan agreement or other transaction may not contradict the current
legislation of Ukraine and other normative-legal documents;
2) entity that enters a credit agreement must have a civilian capability;
3) voting expression of the members of the loan agreement shall be free and comply with its
inner freedom;

11. 4) credit agreement has committed the full legislation of the form;
5) the loan agreement must be directed to the actual occurrence of the legal consequences that
are caused by it;
6) contract that commited by parents, may not contradict the rights and interests of their
children.

12. GRANTING LOANS IN FOREIGN CURRENCY
According to a letter sent by the National Bank of Ukraine in 07.12.2009 banks of Ukraine
and their affiliates 'on the validity of the conclusion of credit agreements in a foreign
currency,' it appears that the authorized banks on the basis of banking licence and written
permission to carry out operations with currency values have the right to undertake
operations with loans in foreign currency.

13. CONCLUSION
Thus, the banking institutions develop common forms of credit agreements by themselves,
depending on the nature of the credit transaction and the method of lending.The loan
agreement provides all the conditions of the credit operations.Well-designed loan agreement
must protect the interests of the Bank and people presented by it through the definition of
all rights and obligations of each party, and setting appropriate limits on the actions of the
borrower, which may pose a threat to the return of funds to the Bank.

14. Thanks for attention!