Enter Company & Loan Details
Fill in the details below to generate a Board Resolution for Loan from Bank.
Document Preview
Board Resolution for Loan from Bank
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
Company Name: ________________
CIN: ________________
Registered Office: ________________
Date of Meeting: __________
Time: __________ (Hours)
Venue: Registered Office of the Company
SUBJECT: OBTAINING LOAN/CREDIT FACILITY FROM BANK AGAINST SECURITIES
The Chairman informed the Board that the Company requires financial assistance from a bank to meet its business requirements. The Board discussed the proposal and the terms of the sanction letter/loan agreement placed before it, and passed the following resolutions:
"RESOLVED THAT the Company do hereby obtain and avail financial assistance/credit facility of an amount not exceeding Rs. ________________ from:
Bank Name: ________________
Branch: ________________
Branch Address: ________________
in order to meet the ________________, and such loan/credit facility shall be obtained on such terms and conditions as specified or contained in the Sanction Letter/Loan Agreement dated ________________ which has been placed before the Board for approval.
RESOLVED FURTHER THAT the consent and approval of the Board be and is hereby accorded to the Company to borrow the aforesaid funds on such terms and conditions as mentioned in the Sanction Letter/Loan Agreement dated ________________, including:
• Loan Repayment Period: ________________
• Rate of Interest: ________________ % per annum on the outstanding balance
• Other terms as specified in the Sanction Letter/Loan Agreement
RESOLVED FURTHER THAT the Board of Directors of the Company be and are hereby authorised to:
• Hypothecate the items/assets which are purchased out of the loan funds in favour of the Bank;
• Pledge fixed deposits or other securities of the Company with the Bank as collateral security;
• Deposit the title deeds of the property of the Company situated at ________________ admeasuring an area of ________________ to create an equitable mortgage thereon as collateral security in favour of the Bank for the loan amount so borrowed, if required;
• Create charge over the assets of the Company and file Form CHG-1 with the Registrar of Companies within the prescribed time.
RESOLVED FURTHER THAT Mr./Ms. ________________, holding DIN: ________________, Director of the Company, be and is hereby severally authorised in relation to the said facility to act on behalf of the Company to:
• Sign and execute the requisite documents, loan agreements, sanction letters, deeds, undertakings, indemnities, and any other documents as may be required by the Bank;
• Execute mortgage deeds, hypothecation agreements, and other security documents under the Common Seal of the Company (wherever required) in terms of the Articles of Association of the Company;
• Operate the loan account and draw funds from the sanctioned facility;
• Represent the Company before the Bank and other authorities in connection with the loan facility;
• Do all such acts, deeds, matters, and things as may be necessary, proper, or expedient for giving effect to this resolution."
For ________________
Signature: _________________________
Name: ________________
Designation: ________________
DIN: ________________
Board Resolution for Loan from Bank
Professional Format Guide for Indian Companies
Introduction
A Board Resolution for Loan from Bank is a formal corporate document that records the Board of Directors' decision to avail credit facilities or loans from banks or financial institutions. Under the Companies Act, 2013, when a company proposes to borrow funds against securities, fixed deposits, or other collateral, prior approval of the Board of Directors is mandatory.
This resolution authorises the company to enter into loan agreements, accept sanction terms, create security over company assets, and designate authorised signatories for loan-related documentation. Banks typically require a certified copy of this resolution before disbursing funds.
Benefits of Using a Standard Format
Utilising a professionally drafted board resolution format ensures all statutory requirements under the Companies Act, 2013 and banking documentation standards are properly addressed. A ready-to-use template saves valuable time, reduces procedural errors, and provides a consistent framework for documenting the Board's approval for borrowings.
Standardised formats meet bank documentation requirements and facilitate smoother loan disbursement.
Relevance to Corporate Finance
Availing loans from banks is a common corporate finance activity. Following Company Registration, businesses often require working capital, term loans, or overdraft facilities to fund operations and growth. The board resolution serves as formal authorisation to the bank confirming that the borrowing has been duly approved by the Board.
If the loan exceeds prescribed thresholds, companies must comply with borrowing limits under Section 180(1)(c) of the Companies Act, 2013, which may require shareholder approval.
Board Resolution for Loan from Bank – Sample Format
[To be printed on Company Letterhead]
Company Name: _______________________________________
CIN: _______________________________________
Registered Office: _______________________________________
CERTIFIED TRUE COPY OF THE BOARD RESOLUTION
Passed at the Meeting of the Board of Directors of the Company
Date of Meeting: __.__.______
Time: ______ (Hours)
Venue: Registered Office of the Company
SUBJECT: Obtaining Loan/Credit Facility from Bank Against Securities
The Chairman informed the Board that the Company requires financial assistance from a bank to meet its business requirements. The Board discussed the proposal and the terms of the sanction letter/loan agreement placed before it, and passed the following resolutions:
RESOLVED THAT the Company do hereby obtain and avail financial
assistance/credit facility of an amount not exceeding Rs. ________________________/-
(Rupees ________________________ Only) from:
Bank Name: ________________________
Branch: ________________________
Branch Address: ________________________
in order to meet the ________________________ (purpose/requirements of the company),
on terms and conditions specified in the Sanction Letter/Loan Agreement dated
________________________.
RESOLVED FURTHER THAT the consent and approval of the Board be
and is hereby accorded to borrow the aforesaid funds on such terms, including:
• Loan Repayment Period: ________________________
• Rate of Interest: ________________________ % per annum
• Other terms as specified in the Sanction Letter/Loan Agreement
RESOLVED FURTHER THAT the Board of Directors of the Company be
and are hereby authorised to:
• Hypothecate items/assets purchased out of the loan funds in favour of the Bank;
• Pledge fixed deposits or other securities of the Company as collateral;
• Deposit title deeds of Company property at ________________________ admeasuring
________________________ to create equitable mortgage if required;
• Create charge over the Company's assets and file Form CHG-1 with the ROC.
RESOLVED FURTHER THAT Mr./Ms. ________________________ (Name),
holding DIN: ________________________, Director of the Company, be and is hereby
authorised to:
• Sign and execute loan agreements, sanction letters, deeds, undertakings, and other
documents;
• Execute mortgage deeds, hypothecation agreements, and other security documents under
the Common Seal of the Company;
• Operate the loan account and draw funds;
• Represent the Company before the Bank and authorities;
• Do all acts necessary to give effect to this resolution.
CERTIFIED TRUE COPY
For ________________________________________ (Company Name)
Signature: __________________________
Name: __________________________
Designation: __________________________
DIN: __________________________
Date: __________________________
Place: __________________________
Frequently Asked Questions
1. Can a board resolution for loan from bank be passed without convening a board meeting?
Generally, the resolution should be passed at a duly convened board meeting. Some Articles of Association allow passing by circulation, but banks usually prefer resolutions from physical or video conference meetings.
2. Who can be considered as an authorized signatory?
Any director may be designated as an authorised signatory. In some cases, the company secretary or CFO may also be authorised to sign loan-related documents on behalf of the company.
3. Is the signature of all directors mandatory?
No. The resolution is passed by a majority of directors present and voting. The certified true copy may be signed by an authorised director or company secretary.
4. Does this resolution need professional certification?
There is no statutory requirement for certification by an external professional, but some banks may request notarisation or additional verification.
5. Is the resolution required to be on company letterhead?
While not mandatory, standard corporate practice and banks generally expect board resolutions on official company letterhead for authenticity.
6. Which resolution is required for loan from bank?
A board resolution passed at a duly convened meeting of the Board of Directors is required. For loans exceeding limits under Section 180(1)(c), shareholder approval via a special resolution may also be needed.