Prime Bank had advanced a substantial amount to ABC Ltd. The bank suspects that the amount advanced is not properly utilised by the company. The bank appoints you as a Practising Company Secretary to submit a fact findin

Prime bank suspects that the amount advanced to ABC Ltd. is not properly utilised by the company. You are a practising company secretary and the bank appoints you to submit a fact finding report on the utilisation of loan advanced by the bank. To Prima bank The following aspects may be specifically examined to ensure that consistency has been maintained in utilisation of moneys advanced to the mortgagor: funds have been utilised for the purposes laid down in the loan agreement. Where funds have not been so utilised, the requisite permission has been taken; requisite conditions laid down to qualify for the outstanding balance of the loan have been fulfilled; the drawls from the loan are being kept in a separate Scheduled Bank Account, payments there from are being made in the manner laid down in the agreement, the said scheduled bank has foregone its right to set-off or lien, in respect of the said account, and the mortgagor is maintaining the records pertaining to the said account, as provided in the agreement. no part of the loan moneys has been transferred to call, short term, fixed or any other deposits, without prior consent. Where such consent has been obtained, the scheduled bank has foregone its right to set off any amount due from the company, against the deposits, the deposits have been realised on their due dates and the proceeds thereof re-deposited in the special account; the expenditure has been financed in the manner provided for in the agreement; and any changes/deviations in the time schedule for completion of the project have been made in consultation with the bank(s)/financial institution(s). Mr. Y Practising Company Secretary YZ Company Secretaries & Associates