Lending is fundamental area of banking business. In lending process, Bank and Financial Institutions (BFIs) to assess borrower and their credit credentials from different angles to ensure proper utilization of facilities not only for fulfilling lending objectives but also to safeguard BFIs from unwarranted legal risk.
Realizing and making efforts to identify and manage legal risk is crucial from the very beginning of credit assessment and proper legal documentation rather to think over the matter only after arising any distress situation.
Specific laws such as Bank and Financial Institutions Act, Companies Act, Banking Offense and Punishment Act etc. and NRB directives sets provisions of dos and don'ts for BFIs while lending. Besides, general law such as different Chapters of Muluki Ain is also referred to govern collateral management and securities documentation.
Recently, newly enacted Muluki Dewani Sanhita (Civil Codes) has come into enforcement by replacing decades old Muluki Ain. New civil codes introduce some of the new provisions in it and some existing provisions are also rearranged.
It is essential for BFIs to educate and train its human resources regularly in area of some critical legal issues in credit assessment and documentation for updated knowledge to minimize legal risk.
Therefore, this course is designed with objective to give legal view on critical legal issues from credit assessment and documentation perspectives in changed context.