“No banking company shall, make advances to a private limited company without obtaining personal guarantee of the directors of such company, in addition to the normal security which the banking company may require.”

It has now been decided that advances made to private limited companies, owned and controlled by the Government, would be exempt from the requirement of obtaining personal guarantee of the nominee directors in addition to normal security as required under the rules. Where however, the private company is not controlled by the Government, the requirement of personal guarantee of nominee directors will be necessary as hithertofore.

Other instructions on the subject shall, however, remain unchanged.

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