In general, deposits mean the sum of money kept at the banks to gain interest on it periodically. The deposit is considered as the property or assets of the person who gives such an amount to the bank for safekeeping. Bank and other financial institutions take deposits as it is their primary source of funds to run their business operations which govern under the strict rules and regulations of RBI. whereas the deposit is also recognized as a source of fund for the companies, other than banks and financial institutions, whose core business activity is not the acceptance of money as a deposits or providing loans or borrowings, as the companies Act, 2013 (The Act) and Companies (Acceptance of Deposits) Rules, 2014 (The Rules) permits companies to accept the money in form of deposit from their members and public on such terms and conditions as prescribed under it.

Under the Act, the deposit is not the only receipt of money from the public for a fixed period of time which is repayable with interest. However, any receipt of money by way of deposit or loan or in any other form may be considered as a deposit under the Act if it does fall in the precluding definition of deposit.

Section 73 of the companies Act, 2013 provided for acceptance of deposits from the member, and section 76 of the companies Act, 2013 provides for acceptance of deposits from the public by prior approval of the members in the general meeting in form of resolution and the terms & conditions as may be agreed upon by issuance of a circular to its members or public as the case may be.


  • The company who intending to accept deposits from its member shall make such invitation by the issuance of circular to all its member by registered post with acknowledgment due or speed post or by electronic mode in Form DPT-1 under the authority and in the name of the Board of directors of the company and same may be published in English newspaper and vernacular newspaper having vide circulation in the state in which the registered office of the company is situated.
  • In addition to the above, every company who is inviting deposits from the public shall advertise the circular in English newspaper having wide circulation in the country and vernacular newspaper having the wide circulation in state and shall upload the copy of circular on the website of the company, if any.
  • Before issuance of the circular or circular in the form of advertisement as said above the circular or circular in the form of advertisement shall be signed by the majority of directors who constitutes the board at the time of approval and deliver the same to the Registrar for registration not more than 30 days before date of issuance
  • Date of issuance shall be the date of dispatch or date of advertisement of circular in the newspaper

♦ Circular or Circular in the form of advertisement shall be valid for earliest of the following:

  • 6 Month from the closure of the financial year in which the issue is made or;
  • Until the date of AGM in which financial statement is laid or;
  • In case AGM has not been held, the date on which AGM should have been held.

♦ The circular in form DPT-1 shall include:

  • a statement showing the financial position of the company, its liquidity, and ability to repay the deposit at the time of maturity
  • the credit rating obtained which shall not be below minimum ratings specified for the fixed deposit for NBFC under the NBFC acceptance of public deposit (Reserve Bank) Directions, 1998 issued by the RBI
  • the total number of depositors;
  • the amount due towards deposits of any previous deposits accepted by the company such other particulars in such form and in such manner as may be prescribed;
  • Certification of a statutory auditor that no default has been committed for repayment of deposit or payment of interest thereon before or after commencement of the Act and in case the company has committed default the 5 years has lapsed from the date of making such default good.
  • Details and consent of the trustee(s) appointed for inviting the secured deposit from the public by the eligible company.


  • Deposit the amount in deposit repayment reserve account, not less than 20% of deposit amount maturing during following years, on or before 30th day of April each year.
  • The company has not made any default in repayment of deposit or interest thereon, if default had occurred, the period of five years had lapsed since the date of making the default good.
  • providing security, if any for the due repayment of the amount of deposit or the interest thereon including the creation of such charge on the property or assets of the company and in case, company does not provide any security to the deposit or part of the deposit, it shall mention that in the circular/form/advertisement or in any other document related to an invitation by using the term “unsecured deposit”.
  • Shall not accept or renew any deposit, whether secured or unsecured, which is repayable on demand or upon notice of less than six months or more than thirty-six months from the date of acceptance or renewal of such deposit but a company may, to meet any of its short-term requirements of funds, accept or renew such deposits for repayment earlier than six months from the date of deposit or renewal, as the case may be provided that such deposits shall not exceed 10 % of the aggregate of the Paid-up share capital, free reserves and securities premium account of the company, and such deposits are repayable not earlier than three months from the date of such deposits or renewal thereof.


  • Every company inviting secured deposits from the public shall provide security by way of creation of charge on the assets of the company, excluding intangible asset, for due repayment of the amount of deposit and interest thereon within 30 Days of acceptance of Deposits from the Public.
  • The amount of such deposits and the interest payable thereon shall not exceed the market value of such assets as assessed by a registered valuer.
  • Every company inviting secured deposit shall appoint one or more trustees for depositors for creating security for the depositors.
  • The security, not being in the nature of a pledge, for deposits shall be created in favor of a trustee for the depositors.
  • The company shall execute a deposit trust deed in Form DPT-2 at least seven days before issuing the circular or circular in the form of advertisement and the consent of the trustee shall be mentioned in the circular or advertisement of circular.
  • Following persons shall not be appointed as trustee(s) for the said purpose who;
  • is a director, key managerial personnel or any other officer or an employee of the company or of its holding, subsidiary or associate company or a depositor in the company;
  • is indebted to the company, or its subsidiary or its holding or associate company or a subsidiary of such holding company;
  • has any material pecuniary relationship with the company;
  • has entered into any guarantee arrangement in respect of principal debts secured by the deposits or interest thereon
  • is related to any person specified above
  • The trustee can be removed only after the consent of all directors present in the meeting of the board and at least one independent director is present in the meeting if any.


  • Every deposit accepted by a company under section 73(2) of the Companies Act, 2013 shall be repaid with interest following the terms and conditions of the agreement.
  • In case of failure to repay the deposit or part thereof or any interest thereon, the depositor concerned may apply to the Tribunal for an order directing the company to pay the sum due or for any loss or damage incurred by him as a result of such non-payment and for such other orders as the Tribunal may deem fit.
  • The deposit repayment reserve account shall only be used by the company for repayment of deposits.


The eligible company as per rule 2 (1) (e) of Acceptance of Deposit rules, 2014 means a public company having a net worth of not less than Rs. 100 crore rupees or a turnover of not less than Rs. 500 crore rupees and which has obtained the prior consent of the company in general meeting by means of a special resolution and also filed the said resolution with the Registrar of Companies before making any invitation to the Public for acceptance of deposits but where the said company accepting deposit within the limits of section 180 (1) (c) of the companies Act, 2013 may accept the deposit by means of ordinary resolution

An eligible company must obtain a credit rating at least once a year for deposits accepted and shall send the copy of it to the ROC along with the form DPT-3 (Return of Deposits)

A non-eligible company means a company that is a private company or a public company that does not fulfill the criteria of an eligible company


Category of companies From Members From Public
Non-eligible Public company 35%
Non-eligible Private company1 100%
Eligible company 10% 25%
Government Company 35%

*The limit of acceptance or renewal of deposit is an aggregate of paid-up share capital, free reserves, and securities premium account of the company

1Provided further that the maximum limit in respect of deposits to be accepted from members shall not apply to the following classes of private companies, namely:-

Which is a start-up, for ten years from the date of its incorporation and

  • Which is not an associate or a subsidiary company of any other company;
  • the borrowings from banks or financial institutions or any body corporate is less than twice of its paid-up share capital of Rs. 50 rupees, whichever is less; and
  • not defaulted in the repayment of such borrowings subsisting at the time of accepting deposits


  • Every company to which the companies (Acceptance of Deposits) Rules, 2014 apply, shall on or before the 30th day of June, of every year, file with the Registrar, a return in Form DPT-3 along with the fee as provided in Companies (Registration Offices and Fees) Rules, 2014 and furnish the information contained therein as on the 31st day of March of that year duly audited by the auditor of the company.


  • Where a company fails to repay the deposit or part thereof or any interest thereon under section 73 (3) of the Act, the depositor concerned may apply to the Tribunal for an order directing the company to pay the sum due or for any loss or damage incurred by him as a result of such non-payment and for such other orders as the Tribunal may deem fit.
  • Where a company accepts or invites or allows or causes any other person to accept or invite on its behalf any deposit in contravention of the manner or the conditions prescribed under section 73 or section 76 or rules made thereunder or if a company fails to repay the deposit or part thereof or any interest due thereon within the time specified under section 73 or section 76 or rules made thereunder or such further time as may be allowed by the Tribunal under section 73,—
  • the company shall, in addition to the payment of the amount of deposit or part thereof and the interest due, be punishable with a fine which shall not be less than one crores rupees or twice the amount of deposit accepted by the company, whichever is lower  but which may extend to ten crores rupees; and
  • every officer of the company who is in default shall be punishable with imprisonment which may extend to seven years and with fine which shall not be less than twenty-five lakh rupees but which may extend to two crores rupees;
  • Provided that if it is proved that the officer of the company who is in default, has contravened such provisions knowingly or wilfully intending to deceive the company or its shareholders or depositors or creditors or tax authorities, he shall be liable for action under section 447.

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