Compliance with section 370(1) required when exemption ends; continued inter company loans must be regularised within a limited grace period.

When an exempted lending company ceases to fall within the exemption in sub section (2) of section 370, the exemption ends and section 370(1) becomes applicable to any loans, guarantees or securities continued thereafter; companies must therefore either pass the special resolution or obtain approval or an extension from the competent authority to regularise such continuing transactions within a specified administrative grace period.

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