Importance Of Documentation – Loans
The banks and the financial institutions have to ensure that the documentation procedure is carried out properly before sanctioning the loans and cash advance to the corporate, firms, and the Individuals. The documentation procedure means that the execution of the security documents in the proper form and according to law. It establishes a relationship between the lending banker or the financial institution and the borrowers. It should be also noted that documentation avoids ambiguities both for the banks and the financial institutions and the borrowers. The documentation also means four things that is documents that is papers consisting of facts and figures, execution by major persons with free consent. The consideration that is involved, and the individual or representative capacity signatures of executants. The documentation is also very useful for future reference or dispute. It should be noted that a document before it can be admitted as evidence has to satisfy several requirements like the signature or the handwriting of the person alleged to have signed the documents must be proved to be of that person. It should also be ensured that the documents are adequately stamped before they are executed. It should also be ensured that the person signing the documents are capable of entering into a valid contract.
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