Section 9(3) in The Industrial Development Bank Of India Act, 1964
(3)The Development Bank shall not grant any loan or advance or other financial accommodation on the security of its own bonds or debentures.[9-A. Prohibited business .-(1) The Development Bank shall not enter into any kind of business with any industrial concern, of which any of the directors of the Development Bank is a proprietor, partner, director, manager, agent, employee or guarantor, or in which one or more directors of the Development Bank together hold substantial interest:Provided that this sub-section shall not apply to any industrial concern if any director of the Development Bank-(i)is nominated as a director of the Board of such concern by Government, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or by a Corporation established by any other law; or(ii)is elected on the Board of such concern by virtue of shares held in the concern by Government, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or by a Corporation established by any other law, by reason only of such nomination or election, as the case may be.Explanation .- "Substantial interest ", in relation to an industrial concern means the beneficial interest held by one or more of the directors of the Development Bank or by any relative (as defined in clause (41) of section 2 of the Companies Act, 1956 (1 of 1956)) of such director, whether singly or taken together, in the shares of the industrial concern, the aggregate, amount paid-up on which either exceeds five lakhs of rupees or five per cent. of the paid-up share capital of the industrial concern, whichever is the lessor.
