Monday, 17 November 2014

what is the meaning of syndication of rupee term loans?

In the financial system, syndication of loan means as under: "Syndication is an arrangement where a group of banks, which may not have any other business relationship with the borrower, participate for a single loan."
"A syndicated facility is a lending facility, defined by a single loan arrangement, in which several or many banks participate."
In a leading financial article, to understand the syndication of loans in common parlance, it has been stated that:
"The standard theory for why banks join forces in a syndicate is risk diversification. The banks in the syndicate share the risk of large, indivisible investment projects. Syndicates may also arise because additional syndicate members provide informative opinions of investment projects or additional expertise after the funding has been extended."
Related Case: H.C. Arora vs State Of Punjab And Others on 12 November, 2009 

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