Prohibited business
Commencement. 19th April, 2021- Sections 2, sub-sections (1), (2) and (4) of section 3, 4 to 14, sub-section (3) of section 15, 16 to 23 and 25 to 48 vide notification No. S.O. 1657(E), dated 16th April, 2021, see Gazette of India, Extraordinary, Part II, sec. 3 (ii).
Section 18 of the National Bank for Financing Infrastructure and Development Act, 2021 deals with prohibited business. The Institution shall not make any loan or advance on the security of its own bonds or debentures. The Act was enacted on 28 Mar 2021.
(1) The Institution shall not make any loan or advance on the security of its own bonds or debentures.
(2) The Institution shall not make loans or advances to any person or body of persons of which any of the directors of the Institution is a proprietor, partner, director, employee or guarantor, or in which one or more directors of the Institution hold substantial interest.
(3) Sub-section (2) shall not apply to any borrower if any director of the Institution is nominated by the Institution or the Central Government as director on the Board of such borrower or is elected on the Board of such borrower by virtue of shares held in the borrower by the Institution.
Explanation.-- For the purpose of this section, “substantial interest” in relation to a borrower, means the beneficial interest held by one or more of the directors of the Institution or by any relative of such director as defined in clause (77) of section 2 of the Companies Act, 2013 (18 of 2013) whether singly or taken together, in the shares of the borrower, and the aggregate amount paid-up on which either exceeds fifty lakhs rupees or two per cent. of the paid-up share capital of the borrower, whichever is lesser or such other threshold as may be prescribed.
Section 18, The National Bank for Financing Infrastructure and Development Act, 2021 (Act 17 of 2021).
Cross-references
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Questions about Section 18
What does Section 18 of the National Bank for Financing Infrastructure and Development Act deal with?
Section 18 of the National Bank for Financing Infrastructure and Development Act is headed "Prohibited business". The Institution shall not make any loan or advance on the security of its own bonds or debentures.
How do I find court cases under Section 18 of the National Bank for Financing Infrastructure and Development Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: National Bank for Financing Infrastructure and Development Act 18, section 18 National Bank for Financing Infrastructure and Development Act, section 18 of the National Bank for Financing Infrastructure and Development Act. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome.
What should I read with Section 18 of the National Bank for Financing Infrastructure and Development Act, and has it changed?
Its own text turns on Companies Act 2 (Definitions), so none of them can safely be read on its own. 1 other provision in this corpus refers back to it.
When was Section 18 of the National Bank for Financing Infrastructure and Development Act enacted?
Section 18 of the National Bank for Financing Infrastructure and Development Act, cited as National Bank for Financing Infrastructure and Development Act 18, was enacted on 28 Mar 2021 as Act 17 of 2021. It is in force as at the date shown on this page.
Other sections of this Act
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 14 Oct 2026. This page is not a substitute for legal advice.