LOAN TO COMPANY BY DIRECTOR'S COLLATERAL

This discussion clarifies whether a director can offer their personal fixed deposits as collateral to secure a bank loan for their private limited company. The consensus is that directors can indeed provide personal assets as security, but they do so at their own risk. If the company faces insolvency, the director could lose their deposited funds up to the value of the guarantee provided. There are no explicit prohibitions against this practice, and directors may even charge a commission for offering such security.