Can anyone advise me as to what costitues 'borrowing' by a public company under the Acceptance of Deposit Rules? Does it include loan from shareholders?
3 Replies
S.Srinivasaraghavan
(Chief Financial Officer and Co)
(11318 Points)
Replied 28 August 2008
Any borrowing that is not acceptance of deposits, is away from the deposit rules and falls under borrowing.
Lekha Balakrishnan
(Lawyer)
(56 Points)
Replied 28 August 2008
But the deposit rules defines deposit to mean any borrowed by a company. So does this not mean tht borrowwing will include shareholder loans? Please note that this is in the context of a public company..
S.Srinivasaraghavan
(Chief Financial Officer and Co)
(11318 Points)
Replied 28 August 2008
Yes, any borowal by a compay is primafacie a deposit. Borrowal that is outside the purview of deposit alone is a mere borrowing. This is what I am saying. In otherwords, we have to see in the case of any borrowing by a company, whether it falls under deposit definition. If yes, it is a deposit; if not, it is mere borrowing. In your case the loan from shareholder is a deposit.
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