Explain the reasons in brief for the following statements in the context of practices prevailing under the banking : (ii) A board resolution is obtained by the bank from a company ratifying the excess drawings permitted

As per Section 179(3) and 180(1)(c) of the Companies Act, 2013, the power to borrow is vested with the Board of Directors; they should exercise this power by means of resolutions passed at meeting of the Board. Any excess drawings have to be authorised by a board resolution. Otherwise, it will not be binding on the company; Further also it may also not bind the company even if the excess drawings have been liquidated subsequently.