Question
Conditions imposed by the lender on the borrower that
certain activities will or will not be carried out are calledā¦ā¦ā¦ā¦Solution
Conditions imposed by the lender on the borrower that certain activities will orĀ will not beĀ carried out are called Covenants. They are stipulated by the lenders to protect themselves from borrowers defaulting on their obligations due to financial actions detrimental to themselves or the business. Covenants are stipulated at the timeĀ of sanction/approval of limits or at the time of review of facilities
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