Section 372 A

No, I don't thin so that it is necessary to mention the interest rate in the Board Resolution. The draft terms and conditions of the loan being given may be placed before the Board.

Please let me know the source, if you have read such a condition any where?

Thank you Ms. Agarwal.

I was reviewing some board resolutions in which i have noticed that some of the resolutions passed under Section 372A of the Companies Act dont have any reference to the interest rate payable by the borrower.

Section 372A (3) says that "no loan to any body corporate shall be made at a rate of interest lower than the prevailing bank rate"

Further Section 372A (5)(a)(ii) says the company shall keep register showing "terms", among others, of the loan.

My doubt are: 

(a) whether the expression "terms" includes "interest rate" also ?

(b) If answer to (a) is "yes", whether the company can enter in to the register (under Section 372A (5)(a)(ii)) particulars which are not mentioned in the Board Resolution ?

Thank you !

As per my opinion inclusing of rate of interest  is good secratarial practice

Dear Robin,

Absolutely yes. The terms of loan per se includes repayment schedule and rate of interest.

The Board Resolution should contain all the terms of loan as far as possible. Or it may also use the words " as per the terms and conditions as set out in the draft agreement, placed before the board for their consideration and approval."

And the register must contain all the details viz Name of the Body Corporate, Amount, Terms, Purpose, date etc.

(a) whether the expression "terms" includes "interest rate" also ?

As Ankur Sir said, obviously Yes. The terms include interest rate definitely.

(b) If answer to (a) is "yes", whether the company can enter in to the register (under Section 372A (5)(a)(ii)) particulars which are not mentioned in the Board Resolution ?

Yes, the company has to enter the details in register as reqd. even if not mentioned in the resolution if the language used in Board Resolution is "As per the terms and conditions placed before the Board".

 otherwise if the above language not used, then all the terms of loan to be given are mentioned in the resolution.

Thank you very much Mr. Srivastava and Ms. Agarwal

could any of u plz answer my question..

can a private company provide an inter corporate loan to another private company which exceeds 60% of the paid up capital of the company providing such loan without taking prior permission form the shareholders? also, is there any judgement on this topic?

thanks

could any of u plz answer my question..

can a private company provide an inter corporate loan to another private company which exceeds 60% of the paid up capital of the company providing such loan without taking prior permission form the shareholders? also, is there any judgement on this topic?

thanks

The provisions of section 372A does not apply on Private company, therefore, it can give intercorporate loan to another private company exceeting 60% of its paidup capital without taking any permission from the shareholders.