Document background
The Bank Facilities Letter is a crucial document in Indonesian banking practice, used when a bank agrees to provide credit facilities to a borrower. It serves as the primary documentation of the bank's formal offer of financing and the terms under which such financing will be provided. This document must comply with Indonesian banking regulations, including those issued by Bank Indonesia and the Financial Services Authority (OJK). The letter typically follows after initial credit approval and due diligence, setting out detailed facility terms, conditions precedent, ongoing obligations, and security requirements. It forms the basis of the banking relationship and, once accepted, creates legally binding obligations under Indonesian law. The document is particularly important as it combines the formal offer of facilities with the key commercial and legal terms that will govern the banking relationship.
