Answer: Terms and conditions for acceptance of deposits under the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014:
- Period: Deposits cannot be accepted or renewed for less than 6 months or more than 36 months. (Short-term deposits for less than 6 months, up to 10% of paid-up capital and free reserves, may be taken to meet short-term needs, repayable not earlier than 3 months.)
- Limit: An eligible public company can accept deposits from the public up to 25% and from members up to 10% of its paid-up share capital and free reserves (other public companies accepting from members only: up to 35%).
- Circular: The company must issue a circular in the form of an advertisement (Form DPT-1) and file it with the Registrar at least 30 days before issue.
- Rate of interest: The rate of interest and brokerage cannot exceed the maximum rate prescribed by the RBI for NBFCs.
- Credit rating: An eligible public company must obtain a credit rating every year and disclose it in the circular.
- Deposit repayment reserve: At least 20% of the deposits maturing in the next financial year must be deposited in a scheduled bank in a separate deposit repayment reserve account.
- Deposit insurance and trustee: Deposits may be insured, and for secured deposits a deposit trustee must be appointed and a trust deed executed.
- Deposit receipt and register: A deposit receipt must be issued within 21 days of receipt of money, and a register of deposits must be maintained.
