Rate for lending

This query is : Resolved

Guest

Guest (Querist)

15 July 2010 Dear Experts,

I would like to know the rate at which loans can be granted by bodies corporate to other corporates under the same group.

Further, does any section under the Companies Act limit the rate of interest payable by a Private Company. Please help me with the section.

Also, can a Holding company give an interest free loan to its Subsidiary or a minimum rate is specified.

Thanks in anticipation.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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15 July 2010 NORMAL RATE FOR INTERCOPRATE LOAN IS 12%

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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15 July 2010 NO COMPANY ACT NOT SPEICFY ANY INTEREST RATE.
IT DEPENDS ON MARKET .

AS PER MY OPINION, ONE COMPANY CAN'T GIVE INTEREST FREE LOAN TO OTHER COMPANY WHETHER IT SUBSIDIARY OR HOLDING.

OTHER EXPERT'S VIEWS ARE SOLICITED.

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Guest

Guest (Querist)

15 July 2010 Thanks for the reply!!!

Could you please specify the section. Coz i believe that the minimum lending rate should be the Bank rate which is 6%.

Please confirm

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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15 July 2010 Upto 30th June 2010, BPLR rate of bank is 12%.
From 1st July 2010, Base rate concept is coming, as per this rate is presribed 6 to 8% .

The base rate, the floor below which a bank cannot lend even to its top-most client, is arrived after factoring in a bank’s cost of funds and other operating expenses. It is effective Thursday and replaces the much-abused benchmark prime lending rate (PLR).

hence as per my opinion , 12% p.a (1% pm) is normal lending rate in market.

Guest

Guest (Querist)

15 July 2010 Hi,

As per query on 11/04/2010, expert Kartik_somu specified Rs. 6% as the lending rate, ie. the rate at which RBI grants loans to commercial Banks.

Please help

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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15 July 2010 Our group have 15 Company in which if we take loan/ depoist from other corporate or ousider, we provide 12% last 6 years.
It is acceptable by IT authority also.