law: Companies Act, 2013 
  185.
  
    Loan
  
  to directors, etc.
  1.      Save as otherwise
  
  provided in this Act, no company shall, directly or indirectly, advance any
  
  loan, including any loan represented by a book debt, to any of its directors or
  
  to any other person in whom the director is interested or give any guarantee or
  
  provide any security in connection with any loan taken by him or such other
  
  person:
  Provided
  
  that nothing contained in this sub-section shall apply to—
  a.     
  
    the
  
  giving of any loan to a managing or whole-time director—
                       
  
   i.        
  
    as
  
  a part of the conditions of service extended by the company to all its
  
  employees; or
                      
  
   ii.        
  
    pursuant
  
  to any scheme approved by the members by a special resolution; or
  a.    
  
  
  b.    
  
    a
  
  company which in the ordinary course of its business provides loans or gives
  
  guarantees or securities for the due repayment of any loan and in respect of
  
  such loans an interest is charged at a rate not less than the bank rate
  
  declared by the Reserve Bank of India.
  Explanation. —For the purposes of
  
  this section, the expression “to any other person in whom director is
  
  interested” means—
  a.     
  
    any
  
  director of the lending company, or of a company which is its holding company
  
  or any partner or relative of any such director;
  b.    
  
    any
  
  firm in which any such director or relative is a partner;
  c.     
  
    any
  
  private company of which any such director is a director or member;
  d.    
  
    any
  
  body corporate at a general meeting of which not less than twenty-five per
  
  cent. of the total voting power may be exercised or controlled by any such
  
  director, or by two or more such directors, together; or
  e.     
  
    any
  
  body corporate, the Board of directors, managing director or manager, whereof
  
  is accustomed to act in accordance with the directions or instructions of the
  
  Board, or of any director or directors, of the lending company.
  2.      If any loan is
  
  advanced or a guarantee or security is given or provided in contravention of
  
  the provisions of sub-section (1 ), the company shall be punishable with
  
  fine which shall not be less than five lakh rupees but which may extend to
  
  twenty-five lakh rupees, and the director or the other person to whom any loan
  
  is advanced or guarantee or security is given or provided in connection with
  
  any loan taken by him or the other person, shall be punishable with
  
  imprisonment which may extend to six months or with fine which shall not be
  
  less than five lakh rupees but which may extend to twenty-five lakh rupees, or
  
  with both.