Directive issued by Reserve Bank for obtaining bank loans against security of company shares

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ve to all commercial banks to regulate their advances against shares. Henceforth, on September 9, 1970 every commercial, bank, which grants or renews an advance limit of every Rs. 50,000 against the security of shares to a borrower, shall stipulate that the shares shall be transferred to its name and that it shall have exclusive voting rights in respect thereof which it may exercise in any manner .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ny restrictions on the exercise of voting rights or any obligation is cast on it to issue proxies. In case the borrower is not agreeable to the revised terms, the bank shall recall the advance forthwith if repayable on demand and, on the expiry of its term, if it is a term loan. If shares form a security composite with any other security, the advance limit against shares shall be segregated an .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... pply only if the shares are held for a period longer than three months. This provision is intended to enable the share-brokers to carry on their normal operations without any difficulty. With a view to ensuring that no hardship or inconvenience is caused to genuine investors in raising funds for their bona fide needs limits of advances against shares up to Rs. 50,000 have been exempted from the .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X