Practice Area · Banking & Institutional Finance
Banking & Institutional Finance: Indian-Law Counsel for Banks, Lenders and Borrowers in Gujarat
Lending, security, legal opinions, trade finance and restructuring for international banks, Indian lenders, development finance institutions, private credit funds, GIFT City lenders and the businesses that borrow from them, with Gujarat assets checked at source.
Who we act forOffshore lendingSecurity in GujaratLegal opinionsRestructuringFAQs
16 Feb 2026
New ECB framework in force
30 days
Companies Act window to register a charge
US$120bn+
Banking assets in GIFT IFSC, June 2026
1 Oct 2025
RBI Project Finance Directions in effect
Mahendra Bhavsar & Co. is a Gujarat-focused law firm, headquartered in Ahmedabad since 1982. The firm acts as Indian-law counsel on lending, security and finance transactions with a connection to Gujarat. Clients include international banks, Indian banks and financial institutions, development finance institutions, private credit funds, and the companies and promoters who borrow from them.
A lender lending into India needs more than a signed facility agreement. It needs security that is valid, registered and enforceable under Indian law. It needs approvals and filings completed on time, and opinions it can rely on. And where a plant, a GIDC plot or agricultural land sits behind the loan, it needs someone who knows how Gujarat records and permissions actually work. That is the work this page describes.
Lifecycle
What Indian Counsel Does on a Financing
Indian counsel’s work runs from the term sheet until the last security filing is complete, and it continues through the life of the loan. On a typical transaction we cover:
01 · Structure
Whether the loan can be made as proposed under Indian law and foreign-exchange rules, and what approvals it needs.
02 · Due diligence
The borrower’s constitution, approvals, existing charges and litigation, and title to the assets offered as security.
03 · Documents
Indian-law review of the facility agreement, and drafting of the Indian security documents, guarantees and intercreditor terms.
04 · Conditions precedent
Board and shareholder resolutions, regulatory approvals, consents from lessors and existing lenders, and the closing checklist.
05 · Opinions
Capacity and enforceability opinions on Indian law, with clear scope and assumptions.
06 · Perfection
Stamping, registration and statutory filings, each within its deadline.
07 · Life of the loan
Consents, waivers, amendments, refinancing, release of security and, if needed, restructuring.
Clients
Who We Act For
Each type of finance client brings a different set of concerns to Indian counsel. The work is organised around them.
International Banks & Offshore Lenders
Lending into India from abroad, often under English or New York law documents.
- Indian-law review of LMA/APLMA-style facility agreements and India riders
- ECB and FEMA structuring checks
- Onshore security through a security trustee
- Capacity and enforceability opinions
- Indian conditions precedent and the process-agent appointment
Indian Banks & Financial Institutions
Term, working-capital, project and consortium lending to Gujarat businesses.
- Title investigation and search reports on Gujarat property
- The full security package
- ROC, CERSAI and Sub-Registrar filings
- GIDC and lessor consents
- Pari passu and no-objection letters, and intercreditor agreements
Development Finance & Export Credit Agencies
Long-tenor lending with policy, environmental and governance conditions.
- Indian-law opinions
- Conditions precedent
- Onshore security
- India-law input on sanctions and anti-corruption clauses
- Working with the client’s environmental and social advisers on Indian legal points
Private Credit & Structured Lenders
Privately placed debt and structured credit, often secured over shares.
- Privately placed non-convertible debentures
- Debenture trust deeds and security
- Share pledges and non-disposal undertakings
- Guarantees and escrow arrangements
GIFT City Lenders
Banks and financial institutions in GIFT City lending to Indian and overseas borrowers.
- Onshore security and filings
- Indian-law opinions
- Conditions precedent
- Enforcement planning
- Questions on IFSCA’s own rules are referred to the client’s IFSCA advisers
Borrowers, Promoters & Sponsors
Companies and business families raising finance, refinancing or renegotiating.
- Term sheets and loan documents
- Covenants the business can live with
- Companies Act approvals
- Stamp duty planning
- Consents, waivers, refinancing and restructuring discussions with lenders
Trade & Export Finance
Letters of credit, bank guarantees and standby credits.
- Guarantee and counter-guarantee documents
- FEMA guarantee reporting points
- Advice and disputes on invocation of guarantees and letters of credit
Offshore Lending
External Commercial Borrowings and the 2026 Changes
Foreign-currency and rupee loans from overseas lenders to Indian borrowers (external commercial borrowings, or ECBs) are governed by RBI rules under FEMA. Those rules were substantially revised in 2026. Guides and checklists written before then may no longer be reliable.
Position as at 5 October 2026
- ECBs are governed by the Foreign Exchange Management (Borrowing and Lending) Regulations, 2018. Their ECB framework was replaced by the First Amendment Regulations, 2026, in force from 16 February 2026. Loans registered before that date largely continue on their original terms.
- Guarantees given by or for Indian entities in cross-border deals are governed by the Foreign Exchange Management (Guarantees) Regulations, 2026, notified on 6 January 2026.
- From 1 July 2026, RBI directions allow Indian banks to finance the acquisition of control of non-financial companies, subject to conditions. This changes how some acquisition loans are structured.
On an offshore loan we check, against the rules in force on the closing date:
- whether the lender is a recognised lender and the borrower an eligible borrower;
- the amount, maturity, end-use and pricing;
- what security the borrower can give to an overseas lender, and the approvals that needs;
- the loan registration number, reporting and the authorised dealer bank’s sign-offs;
- guarantees from Indian group companies or promoters, and how they must be reported.
Where a point needs a separate FEMA or tax opinion, we say so early and work alongside the client’s advisers, so it does not hold up closing.
Security
Creating and Perfecting Security in India
In India, signing a security document is not the end of the job. Most security has to be stamped, and some has to be registered. Almost all corporate security has to be filed with one or more public registries, most with fixed deadlines. A missed step can leave a lender unsecured in an insolvency.
Stamping
Stamp duty is a state levy and varies with the document and the state. In Gujarat it is set by the Gujarat Stamp Act, 1958. An unstamped document cannot be relied on in evidence until duty and penalty are paid.
Timing: For documents signed in Gujarat, at or before execution (or the next working day)
Registration
Mortgage deeds over land are registered with the Sub-Registrar where the property is situated.
Timing: Generally within four months of execution (Registration Act, 1908)
Charge filing with the Registrar of Companies
A company must register a charge on its property with the ROC. An unregistered charge is not taken into account by a liquidator or any other creditor.
Timing: Within 30 days of creation; the Registrar can allow more time on payment of additional fees
CERSAI filing
Security interests are filed on the central registry (CERSAI).
Timing: Promptly after creation; registration affects priority and the lender’s enforcement rights
Timing shown is the position as at 5 October 2026.
We prepare the full perfection checklist at the start of the transaction and track each filing to completion. Lenders receive the filed copies and a closing memorandum.
Gujarat
Security over Gujarat Assets
Much of Gujarat’s industrial and project value sits on GIDC estates, on land converted from agricultural use, or on land held under restricted tenure. Each has its own permissions and records. Lenders who treat Gujarat land like freehold property in any other city risk taking security that cannot be enforced, or cannot be created at all.
GIDC Plots
Most GIDC plots are leasehold. Mortgaging a plot needs GIDC’s mortgage permission, applied for online on GIDC’s portal. The application includes the bank’s request letter to the Regional Manager, the executed lease deed, the sanction letters and, where applicable, an existing lender’s no-objection and the pari passu agreement. We prepare the application and track it.
Land Records (7/12 and 8A)
Village land records show the holder, the tenure and, in the charges column, existing loans. Mutation entries show how the land changed hands. We read these against the registered documents, not on their own.
Registration History
Gujarat’s online registration records (Index-2) help trace past transactions over many years. They are a search tool, not a certificate that the land is free of charges, so we confirm them at the Sub-Registrar’s office where it matters.
Non-Agricultural Land
Industrial and commercial use of agricultural land needs the Collector’s non-agricultural permission under the Gujarat Land Revenue Code. We check the permission, its conditions and whether the use on the ground matches.
New and Restricted Tenure
Land held on new or restricted tenure needs the Collector’s prior sanction before it can be transferred or mortgaged, usually on payment of a premium. We identify the tenure early, because it can decide whether the land can be offered as security at all.
Stamp Duty on Gujarat Security
Mortgages over Gujarat property attract Gujarat stamp duty even where documents are signed elsewhere, and duty on consortium and multiple-lender mortgages has been the subject of Supreme Court authority and legislative change. We work out the duty position before signing, not after.
Where the security is real estate, our Real Estate, Land & Development team carries out the title work.
Opinions
Indian-Law Opinions for Lenders
A legal opinion is only as useful as its scope is clear. We agree the form of opinion with the lender’s counsel early, so that there are no surprises at closing.
- Capacity and authority: the Indian party exists, has power to borrow, guarantee or give security, and has taken the corporate approvals the Companies Act requires.
- No conflict: the transaction does not breach the party’s constitution or Indian law, and the approvals and consents it needs are in place.
- Enforceability: the obligations are valid and binding under Indian law, and a choice of foreign law and forum will be recognised, subject to stated qualifications.
- Foreign judgments and awards: how a judgment from the chosen court, or an arbitral award, would be enforced in India.
- Security: what is needed to create and perfect each security interest, and what has been done.
Every opinion sets out its assumptions and qualifications plainly, including stamp duty, insolvency and public-policy points. A lender’s credit committee can read it and know exactly what it is relying on.
Credit Support
Guarantees, Share Pledges and Intercreditor Arrangements
Guarantees
Guarantees from Indian group companies and promoters are common. A company’s power to give them is limited by the Companies Act, and cross-border guarantees must also meet the 2026 FEMA guarantee rules. We check both before the guarantee is signed.
Share Pledges
Shares in Indian companies are usually pledged through the depository system. The Supreme Court has held that invoking a pledge does not by itself discharge the debt; the debt is reduced when the shares are sold. Pledges by or to non-residents raise separate FEMA points.
Security Trustees
Where several lenders share security, an Indian security trustee usually holds it for all of them. This makes changes in the lender group, and enforcement, simpler. We draft the trust and agency terms and the related filings.
Intercreditor Agreements
Consortium lending, senior and subordinated debt, and onshore and offshore lenders sharing one asset all need clear ranking, voting and enforcement rules. We draft and negotiate intercreditor agreements and pari passu arrangements, including where an existing lender’s consent is needed.
Lenders
Project, Development, Private Credit and GIFT City Lenders
Project Finance
Indian banks’ project lending has been governed by the RBI’s Project Finance Directions since 1 October 2025, which affect conditions to drawdown, consortium arrangements and how stress is handled. We act on the Indian-law and Gujarat land and approval aspects of project financings, working with the project team.
Development Finance Institutions & Export Credit Agencies
These lenders expect detailed Indian-law opinions, a full set of conditions precedent and onshore security. They also attach environmental, social and integrity conditions. We give the Indian-law view on those conditions and work with the client’s environmental and integrity advisers on the rest.
Private Credit
Private credit into India is often made through privately placed debentures, secured by debenture trust deeds, share pledges and guarantees. We prepare and review these documents. Where an issue needs listing or SEBI work, the client’s capital-markets counsel handles that part and we cover the security and Gujarat elements.
GIFT City Lenders
Banks and financial institutions in GIFT City’s International Financial Services Centre, including IFSC banking units, lend to Indian borrowers as overseas lenders do, so the same FEMA, security and enforcement points apply. We act on the onshore security, opinions and conditions precedent. Questions on IFSCA’s own rules are referred to the client’s IFSCA advisers.
Stress
Restructuring and the Insolvency Code
We plan for stress when the loan is documented, and we advise lenders and borrowers on how to deal with it when it comes.
At Documentation
We map how the security and guarantees would fare in an insolvency under the Insolvency and Bankruptcy Code, as amended in 2026: the moratorium on enforcement, the order of payment, transactions that can be set aside, and claims against guarantors.
Restructuring
Standstills, amendments, refinancing and restructuring agreements, including intercreditor arrangements among consortium lenders.
Insolvency Proceedings
Claims, security positions and resolution plans before the National Company Law Tribunal are handled with our Dispute Resolution, Litigation & Arbitration team.
Trade Finance
Bank Guarantees and Letters of Credit
Rarely. Indian courts treat bank guarantees and letters of credit as independent of the underlying contract. They intervene only in narrow cases, such as fraud of which the bank has notice, or irretrievable injustice. We advise beneficiaries, applicants and banks on drafting, demands and invocation disputes, including guarantees under international rules such as URDG 758, UCP 600 and ISP98.
International
Working with International Law Firms
Many of our finance mandates come through international law firms acting for the lender or the sponsor. We work as their Indian-law team. We review the facility agreement against Indian law, prepare the Indian security and closing documents, and give the Indian opinion. We explain Indian requirements in plain terms the international team can pass on to its client. We work to the transaction timetable across time zones. See also International & Cross-Border Work and Corporate & Business Transactions.
Insights
Related Insights from the Firm
Articles by the firm on the points this page covers.
The Firm
How We Work
- An assessment first. The firm looks at the transaction and tells you what Indian law and Gujarat practice will require, before any engagement.
- Scope and fees in writing. The scope, what is excluded and the fee basis are agreed in writing before work starts.
- One point of responsibility. The matter has a single point of responsibility within the firm from term sheet to final filing. Meet the team at Mahendra Bhavsar & Co.
- Selective by design. The firm takes on transactions where its Gujarat and Indian-law work adds real value. Where another adviser is needed, it says so.
FAQs
Frequently Asked Questions
Can an overseas lender take security over land in Gujarat?
Yes, within limits. FEMA rules govern what security a borrower can give for an external commercial borrowing and on what conditions. In practice the security is often held by an Indian security trustee for the lenders. We check the position against the rules in force at closing.
What filings are needed after security documents are signed?
Usually stamping, registration of mortgage deeds with the Sub-Registrar, registration of the charge with the Registrar of Companies, and a CERSAI filing. Each should be done promptly, and most have fixed deadlines.
Can a GIDC plot be mortgaged?
Yes, with GIDC’s mortgage permission. The application is made online, with the bank’s request letter to the GIDC Regional Manager, the lease deed, the sanction letters and, where there is an existing lender, its no-objection.
Is stamp duty payable in Gujarat if the documents are signed abroad?
Where a document secures Gujarat property, Gujarat stamp duty is generally payable when it comes into the state, with credit for duty already paid elsewhere in India in some cases. We confirm the duty before signing.
What does an Indian-law enforceability opinion cover?
Capacity and authority, absence of conflict, approvals, enforceability of the obligations and of the chosen law and forum, and the steps needed for the security. Its assumptions and qualifications are stated in full.
Can an Indian company guarantee a loan to its overseas parent or affiliate?
Sometimes. It depends on the Companies Act limits and the 2026 FEMA guarantee rules, including reporting. We check both early, because the answer can change the structure.
Will an Indian court enforce an English judgment or a foreign arbitral award?
A judgment of a notified superior court in a reciprocating territory, such as the High Court in England, can be enforced in India much like a local decree. Foreign arbitral awards from New York Convention countries notified by India are enforced under Part II of the Arbitration and Conciliation Act, 1996, on limited grounds of challenge.
What happens to a lender's security if the borrower enters insolvency?
Enforcement is generally paused by the moratorium, and the security is dealt with in the insolvency process. Properly registered security matters a great deal at this stage.
Can banks in GIFT City lend to Indian companies?
Yes. They lend as overseas lenders do, so FEMA and Indian security rules apply. Questions on IFSCA’s own rules go to the lender’s IFSCA advisers.
Can payment under a bank guarantee be stopped by a court?
Only in narrow cases, such as fraud of which the bank has notice, or irretrievable injustice.
Why use a security trustee?
A security trustee holds the security for all the lenders. Lenders can then change, and the security can be enforced, without re-creating it each time.
What approvals does an Indian borrower need before borrowing?
Typically a board resolution and, for public companies, shareholder approval where borrowing exceeds Companies Act limits or security is given over the business. Regulatory approvals and consents from lessors or existing lenders may also be needed.
What does Indian counsel do on a financing?
Indian counsel checks that the loan can be made under Indian law and foreign-exchange rules, reviews the facility agreement, drafts the Indian security and guarantees, manages the conditions precedent, gives the Indian-law opinion, and completes stamping, registration and statutory filings within their deadlines.
What changed for offshore lending into India in 2026?
The external commercial borrowing framework was replaced from 16 February 2026, cross-border guarantees came under new FEMA regulations in January 2026, and from 1 July 2026 Indian banks may finance the acquisition of control of non-financial companies, subject to conditions.
Contact
Discuss a Financing
Tell the firm about the transaction, the parties and the assets involved, and you will receive a reply on how it can help and what Indian law will require. Enquiries can also be made through the Contact page.