Companies Act 2013 - Companies may accept the deposits from members without deposit insurance till 31st March, 2015

(a)  issuance of a circular to its members including therein a statement showing the financial position of the company, the credit rating obtained, the total number  of depositors and the amount due towards deposits in respect of any previous deposits accepted by the company and such other particulars in such form and insuch manner as may be prescribed;

(b)  filing a copy of the circular along with such statement with the Registrar within thirty days before the date of issue of the circular;

(c)  depositing such sum which shall not be less than fifteen per cent. of the amount of its deposits maturing during a financial year and the financial year next following, and kept in a scheduled bank in a separate bank account to be called as deposit repayment reserve account;

(d)  providing such deposit insurance in such manner and to such extent as may be prescribed;

(e)  certifying that the company has not committed any default in the repayment of deposits accepted either before or after the commencement of this Act or payment of interest on such deposits; and

(f)   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

Provided that in case where a company does not secure the deposits or secures such deposits partially, then, the deposits shall be termed as ‘‘unsecured deposits’’ and shall be so quoted in every circular, form, advertisement or in any document related to invitation or acceptance of deposits.

Further Rule  5(1) of theCompanies (Acceptance of Deposits) Rules, 2014 dealing with the Manner and extent of deposit insurance provides that:

“e very company referred to in sub-section (2) of section 73 and every other eligible company inviting deposits shall enter into a contract for providing deposit insurance at least thirty days before the issue of circular or advertisement or at least thirty days before the date of renewal, as the case may be.”

However,Ministry of Corporate Affairs has by notification dated 06-06-2014, has amended rule 5 of the Companies (Acceptance of Deposits) Rules, 2014 to provide that companiesmay accept the deposits without deposit insurance contract till the 31st March,2015.

Download the Notification >>