Introduction to Acceptance of Deposits Rules

In a pursuit to make additional improvements to the existing Companies Act, 2013, The Ministry of Corporate Affairs released a notification on 31 March 2014 declaring the Companies (Acceptance of Deposits) Rules, 2014. The rules basically stipulate the provisions for companies to accept deposits from the public.

As per Section 2(31), “Deposit” includes any receipt of money by way of deposit or loan or in any other form by a company, but does not include such categories of amount as may be prescribed in consultation with the Reserve Bank of India; You can gain detailed knowledge of what constitutes as a deposit by following MCA e-book Acceptance of Deposit rules.

Acceptance of Deposits Rule: Where is it applicable?

The acceptance of deposits rule is applicable for “eligible” companies. Eligible companies are companies(Public Companies Only):

• Have a net worth of Rs. 100 crores or more OR
• Have a net Turnover of Rs. 500 crores

The eligible companies also have to fulfill three conditions to be eligible for a loan.

• Prior consent of company in general meeting by SR
• Filing the SR to the registrar before making any sort of initiations
• If the proposed deposit turns out to be less than the net worth of the company OR can be filed to obtain consent.

Amendments to Acceptance of Deposits Rule

In a notification released on the 5th of July, 2018 the Ministry made sweeping amendments to the rules for acceptance of deposits. The amendments will be in effect from the 15th of August,2018.

Salient Amendments to the rules:

• A provision added to attach Statutory Auditors certificate with Form1-DPT stating company has not defaulted in repayment of deposits or the interests on such deposits in rule Rule 4 sub-rule(1).
• The omission of Rule 5
•  The provision in Rule 13 has been substituted by “Provided that the amount remaining deposited shall not at any time fall below twenty percent. of the number of deposits maturing during the financial year.”
• The omission of the subclause (k) of rule 14 sub-rule(1).
• In the annexure, The “Form DPT-1 Circular or Circular in the form of advertisements” replaces “Form DPT-1”
• “Form DPT-3 Return of deposits[Pursuant to rules 3 and 16 of the Companies (Acceptance of Deposits)] ” replaces “Form DPT-3”

For a detailed overview of the amendments and particulars of the form, See the Amendment Notification by the MCA.