BANKING LAW

MAHAVIR JAIN (Querist) 30 April 2010 This query is : Resolved
I AM HAVING A PRIVATE LIMITED COMPANY REGISTERED UNDER COMPANIES ACT 1956 HAVING 4 DIRECTORS, BY RESOLUTION OF BOARD TWO DIRECTORS ARE ALLOWED TO OPERATE BANK ACCOUNTS. DUE TO CERTAIN DISPUTES BETWEEN DIRECTORS TWO OF THE DIRECTORS WHO WERE NOT ON SIGNING LIST GAVE AN APPLICATION TO THE DEALING BANK & ASKED TO MODIFY ACCOUNT & MAKE IT NO DEBIT ACCOUNT. WHETHER BANK CAN MODIFY ACCOUNT IN SUCH SITUATION WITHOUT TAKING APPROVAL OF BOARD IF NO WHAT REMEDIES ARE AVAILABLE TO COMPANY & DIRECTORS.

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A V Vishal (Expert) 30 April 2010
Bank cannot/willnot modify the account status without a proper resolution.

Parthasarathi Loganathan (Expert) 01 May 2010
Any change in operations mandate has to be passed by a Resolution of the company's Board. Based on this document only Bank can act.