Board Resolution Format for Overdraft Facility from the Bank

In order to avail an overdraft (OD) facility from a bank, the company will have to provide certain documents. One of such documents is a certified true copy of the board resolution passed in the meeting of the board of directors of the company.

At first, the management should make an application to the bank seeking approval on getting the overdraft facility. The bank may ask for copies of the business plan, details of ongoing projects and financial statements before giving in-principle approval on the limit of OD facility to be allowed.

Here is a template of a board resolution for availing overdraft facility from the banker of the company. You can add or delete from the resolution as you may think appropriately.

FORMAT #1 (Overdraft facility with collateral.)

//Certified True Copy//

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE ___TH MEETING OF THE BOARD OF DIRECTORS OF __________ LIMITED, HELD ON (DAY), THE ___TH DAY OF (MONTH),  20XX,  AT (TIME) A.M./P.M. AT ITS REGISTERED OFFICE SITUATED AT (FULL ADDRESS).

Item No. ___: To Avail Overdraft Facility from _________ Bank

The Managing Director informed the Board that the company had made an application to __________ Bank for availing an overdraft facility to meet the working capital needs of the company. The OD facility will be availed in its current account maintained with the bank for an aggregate amount up to Rs. _________. The bank has given its in-principle approval on the application. The company is required to complete certain formalities and submit necessary documents to the bank to avail the facility. 

The Board considered the same. Upon motion duly passed and seconded, it was:

“RESOLVED THAT the company do avail an overdraft facility from __________ Bank, ________ Branch, (Address) in the current account of the company bearing number ________ for meeting its working capital requirements.

RESOLVED FURTHER THAT the overdraft facility be obtained from the said Bank to borrow money from time to time for an aggregate amount of outstanding not exceeding Rs. ________ (Rupees ______________ only) at any time on such terms and conditions as agreed to under a loan agreement/ loan sanction letter the draft of which was tabled at the meeting and initialed by the Chairperson for the purpose of identification.

RESOLVED FURTHER THAT (Name of the Director/Officer), (Designation) and (Name of the Director/Officer), (Designation) be and is hereby jointly authorised to finalise and execute such agreements, applications, declarations, confirmations and documents on behalf of the company as may be required to avail the said overdraft facility.

RESOLVED FURTHER THAT a first pari passu charge by way of assignment/hypothecation/mortgage on the property of the company i.e. land/building admeasuring ___ sq. ft. situated at (Address) be created in favour of _______ Bank to secure the aforesaid overdraft facility.

RESOLVED FURTHER THAT (Name of the Director/Officer), (Designation) and (Name of the Director/Officer), (Designation) of the company be and is hereby jointly authorised to deliver to and deposit with the said bank, the title deeds of the aforesaid property with an intent to create an equitable mortgage thereon in favour of the bank as security for the due repayment of aforesaid the overdraft facility.

RESOLVED FURTHER THAT (Name of the Director/Officer), (Designation) and (Name of the Director/Officer), (Designation) of the company be and is hereby jointly authorised to file the said deeds and documents with the concerned authorities including Registrar of Companies (RoC), ________.

RESOLVED FURTHER THAT it is hereby noted that (Name of the Director), (Designation) has agreed to furnish a personal guarantee against the aforesaid credit facility.

RESOLVED FURTHER THAT the common seal of the company be affixed, if required, to the stamped engrossment(s) on the aforesaid deeds and documents in the presence of (Name of the Director/Officer), (Designation), who shall counter sign the same in the token thereof.

RESOLVED FURTHER THAT (Name of the Director/Officer), (Designation) and (Name of the Director/Officer), (Designation) be and is hereby jointly authorised to do all such acts, deeds and things as may be necessary to give effect to the foregoing resolutions.

RESOLVED FURTHER THAT the Managing Director of the company be and is hereby authorised to sign and forward a certified true copy of the foregoing resolutions to the concerned authorities as and when necessary.”

For __________ Limited

      (Signature)

(Name of the Managing Director)

Managing Director

DIN: _________

FORMAT #2 (Overdraft facility without collateral.)

“RESOLVED THAT the consent of the Board of Directors be and is hereby given to avail an overdraft facility from ________ Bank, ________ Branch in the current account of the company bearing number ________ for an aggregate amount of outstanding not exceeding Rs. ________ (Rupees ______________ only) at any time on such terms and conditions as agreed to under a draft loan agreement/ loan sanction letter as placed before the Board and initialed by the Chairperson for the purpose of identification.

FURTHER RESOLVED THAT (Name of the Officer), (Designation) and (Name of the Officer), (Designation) be and is hereby severally authorised to finalise and execute such applications, deeds, declarations and documents on behalf of the company as may be required to avail the said overdraft facility and to file the same with the concerned authorities including Registrar of Companies (RoC), ________ as necessary.

FURTHER RESOLVED THAT (Name of the Officer), (Designation) and (Name of the Officer), (Designation) be and is hereby severally authorised to do all such acts, deeds, things and matters as may be necessary to give effect to the foregoing resolutions.

RESOLVED FURTHER THAT any two directors of the company be and is hereby jointly authorised to sign and forward a true copy of the foregoing resolutions to the concerned authorities as and when necessary.”