Apex Co-operative Bank Ltd, a banking company, proposes to advance a housing loan to its whole-time director in the ordinary course of its business. Under section 185 of the Companies Act, 2013, this loan is:

Section 185(1) of the Companies Act, 2013 prohibits a company from advancing any loan, directly or indirectly, to any of its directors or to any other person in whom a director is interested, and from giving any guarantee or security for a loan taken by such persons. The proviso exempts loans to managing or whole-time directors as part of service conditions applicable to all employees or under a scheme approved by special resolution, and loans given by companies which in the ordinary course of their business provide loans or guarantees, such as banking companies, non-banking financial companies and housing finance companies. Since Apex advances the loan in the ordinary course of banking business, the exemption applies, and the options treating the loan as absolutely barred or as needing member approval are wrong.