To protect their interest. the financial institutions reinforce the asset security stipulation with a number of restrictive terms and conditions. These are known as covenants. They are positive/affirmative and negative in the sense of what the borrower should and should not the conduct of its operations and fall broadly into four sets as respectively related to as liabilities, cash flows and control. Some negative covenants discussed as under:

reCAPTCHA is required.

Share This