Question
Any loan to a relative of a director must be approved
by:Solution
• According to RBI regulatory restrictions, banks should not grant loans and advances aggregating to Rs. 25 lakhs and above to relatives of their own Chairman/Managing Director or other Directors without the prior approval of the Board of Directors or Management Committee. • Conflicts of Interest: Loans to directors' relatives are considered related party transactions. To ensure these are at "arm's length," approval by the Board (or a Board Committee) is necessary.
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