Sample Promissory Note for Bank Overdraft Loan Facility

A banker may ask its customer to produce a promissory note in advance for sanction of an overdraft facility to him. The promissory note acts as a mortgage for the getting this facility from the bank.

Each bank may have their own format of promissory note for this. You can approach the bank to get the format. Otherwise, you can prepare your own.

Hereunder is an example of such a promissory note for availing an overdraft facility from a bank.

TEMPLATE

PROMISSORY NOTE

IN₹ ________                                                        (Location)

                                                                                Dated _________

On Demand, I promise to pay to (Name of the Bank), at (Place) or order the sum of Rupees ____________________ only being the amount drawn/ availed by me under the overdraft limit sanctioned to me against the security of my savings bank account bearing number ____________ along with interest at the rate of ______ percent per annum due thereon up to the date of payment.

In case, I fail to repay the said amount, I undertake to pay penal interest at the rate of ______ percent per annum over and above the normal rate of interest as mentioned hereinabove. I acknowledge that any changes by the bank in the rate of interest on overdraft limit from time to time will be binding upon me.

(Affix a revenue stamp of IN₹ 1 only)

(Signature)

(Name of the Customer)

(House Address)

[Maker]

To,

The Branch Manager

(Name of the Bank)

(Office Address)

[Payee]