A bank is similar to any other corporate entity in that it is subject to tax on its profits against which it may set off its losses and it is also subject to special statutory requirements imposed on banks in order to ensure that, for the protection of bank customers, a bank has adequate capital reserves at any given time. When making available a Facility a bank will always calculate the rate of return or, put simply, amount of profit, that it will earn as a result of lending to the borrower. The purpose of this clause is to protect the bank in the event that any change in law or taxation as applicable to the bank results in any reduction in the bank's rate of return. In these circumstances, the bank is entitled to recover from the borrower additional amounts so as to preserve its anticipated rate of return.
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