Acceptance of deposits from public by certain companies
📚 Law Minded summary
Some public companies can take deposits from people who are not members, but only if they are large enough and only on stricter terms.
They must meet a prescribed net worth or turnover, get a credit rating every year, and follow everything section 73 requires.
Where the deposits are secured, a charge must be created on the company's assets within thirty days.
(1) Notwithstanding anything contained in section 73, a public company, having such net worth or turnover as may be prescribed, may accept deposits from persons other than its members subject to compliance with the requirements provided in sub-section (2) of section 73 and subject to such rules as the Central Government may, in consultation with the Reserve Bank of India, prescribe: Provided that such a company shall be required to obtain the rating (including its networth, liquidity and ability to pay its deposits on due date) from a recognised credit rating agency for informing the public the rating given to the company at the time of invitation of deposits from the public which ensures adequate safety and the rating shall be obtained for every year during the tenure of deposits: Provided further that every company accepting secured deposits from the public shall within thirty days of such acceptance, create a charge on its assets of an amount not less than the amount of deposits accepted in favour of the deposit holders in accordance with such rules as may be prescribed.
(2) The provisions of this Chapter shall, mutatis mutandis, apply to the acceptance of deposits from public under this section.
All sections in Chapter V — Acceptance of Deposits by Companies