Wrong credit of loan

[DR.MARIAPPAN GOVINDARAJAN]

The directors of one Nidhi company approached their bank for getting personal loan mortgaging their own properties. In the same company is also maintaining its account. The bank wrongly credited the entire loan amount in the accounts of the company and distributed the said amount to the directors. The said fact came to be known when the company accounts is audited by the auditor. How it could be rectified.

AI Summary

Wrong credit of loan: company must repay bank, obtain confirmation and regularise directors' indebtedness swiftly.
Repay the bank to close the erroneous loan account, obtain written bank confirmation of the mistaken credit, and use a suspense account in the company books to reflect the receipt and subsequent transfers to directors until repayment and regularisation are completed.