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Business Studies

Loans from Financial Institutions

Financial ins...

Question

Financial institutions may sometimes have their nominees on the Board of Directors of borrowing companies.

A

True

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B

False

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Solution

The correct option is A
True

True. These financial institutions may have their nominees on the Board of Directors of the borrowing company thereby restricting the powers of the company.

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Financial institutions may not have their nominees on the Board of Directors of the borrowing company.

Q. Companies may issue the debentures as security against loans taken from banks/financial institutions as _______.

Q. Statements :
The government has spoiled many top ranking financial institutions by appointing bureaucrats as directors of these institutions.
Conclusions :
I. The government should appoint directors of the financial institutes taking into consideration the expertise of the person in the area of finance.
II. The director of the financial institute should have expertise commensurate with the financial work carried out by the institute.

Q. Statement Government has spoiled many top ranking financial institutions by appointing bureaucrats as directors of these institutions.
Conclusions
I. Government should appoint directors of the financial institutes taking into consideration the expertise of the person in the area of finance.
II. The director of the financial institute should have expertise commensurate with the financial work carried out by the institute.

Q. Central Government has prescribed that public companies with paid up share capital of______;or turnover of_____; or in aggregate, outstanding loans/ borrowings/ debentures/ deposits exceeding ______as on the last date of latest audited financial statements mentioned below shall have at least______independent directors.

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