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repayment of deposit

JOSEPH DAVID (GM FINANCE) (286 Points)

30 June 2009

A manufacturing company accepted public deposits for one year-

A depositor is asking for the repayment of deposit after 2 months. Can the company repay deposit without interest

pl advise

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2 Replies

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 30 June 2009

Sir,

Before answering the question i would like to know whether your company is a NBFC or otherwise.

The undermentioned link can very well guide you in your query

DNBS PD) C.C. No. 44/02.01/2004-05 dated October 5, 2004 , wherein the public deposit or a deposit or grant any loan against such deposits should be retained for a minimum lock-in period

Regards,

Vaibhav Shukla

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 01 July 2009

Dear Joseph, As per rule 3 of Companies (Acceptance of Deposit Rules) 1975 no Company shall accept or renew any deposit which is repayable on demand or on notice or after a period of less than 6 months or more than 36 months from the date of acceptance or renewal of such deposit. And the Company has accepted the deposit for 12 months and there is restriction for acceptance for less than 6 month (in some case 3 month) and more than 36 months. Where the Company makes repayment of a deopsit after the expiry of 6 months but before the expiry of the period for which such deposit was accepted by the company, the rate of interest payable by the company on such deposit shall be reduced by 1% from the rate at which the company would have to repay it . Thus in this case the Company can not repay this reposit as it is not repayable on demand.