Fixed deposit u/s 372a

Mayuri Lal (officer CS) (748 Points)

01 March 2012

Dear Members,

If a Company is proposing to make fixed deposit for time being, then whether this will fall u/s 372A.

Please guide

Its urgent

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6 Replies

CA.HARSHIT KHATRI (CHARTERED ACCOUNTANT) (47 Points)
Replied 01 March 2012

Loan to any other body corporate including deposits is covered under the provisions of Sec 372A

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CA.HARSHIT KHATRI (CHARTERED ACCOUNTANT) (47 Points)
Replied 01 March 2012

However deposits with a banking company (bank) is not covered under 372A

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CS Aditya Agrawal (PCS) (110 Points)
Replied 01 March 2012

As per my view 372A does not cover any deposit. It is for inter corporate loan and investment in securities of the company.

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Mayuri Lal (officer CS) (748 Points)
Replied 01 March 2012

Originally posted by : CA.HARSHIT KHATRI
	Loan to any other body corporate including deposits is covered under the provisions of Sec 372A

Will it cover deposit also ? pls confirm

CS Aditya Agrawal (PCS) (110 Points)
Replied 01 March 2012

No, as far as my knowledge is concerned.

(Guest)

Sec 372A - Inter-corporate loans and investments.

(1) No company shall, directly or indirectly,-

(a) make any loan to any other body corporate:

(b) give any guarantee, or provide security, in connection with a loan made by any other person to , or to any other person, by any body corporate: and

(c) acquire by way of subscripttion, purchase or otherwise the securities of any other body corporate,

Pls take a note INDIRECT loan is also coverd therefore ,deposits will be conted under the previw of the said sec...